TimesLeader.com

November 2, 2008

Slot gambling on rise but short of goal

By Ron Bartizek rbartizek@timesleader.com
Business & Consumer / City Editor

PLAINS TWP. – When Mount Airy Casino Resort opened its slot machine floor for the first time last October, it immediately swiped about 15 percent of Mohegan Sun at Pocono Downs’ gambling revenue.

What a difference a year makes; both casinos racked up solid year-over-year gains the week of Oct. 20-26, a period comparable to Mount Airy’s initial seven days. Mohegan Sun at Pocono Downs took in $44.7 million in wagers, up by one-third from 2007. Gamblers fed $51.7 million into Mount Airy’s slots during the same period compared to $47.7 million last year.

The comparison is not entirely fair, since at this time last year Mohegan Sun at Pocono Downs was operating in an interim casino with only 1,200 machines and a modest buffet, while Mount Airy boasted twice as many slots, a hotel and multiple restaurants. The Downs’ permanent casino with nearly 2,500 slots, eating places and other non-gaming entertainment venues opened in July.

Still, the impact of Mount Airy was undeniable; after typically taking in $40 million or more in weekly wagers prior to the opening of the Poconos casino, gambling at the Downs fell into the low $30 million range, slipping to $26.5 million in mid-December before recovering during last year’s holiday season. Since then weekly wagering at the Downs had been consistently above $30 million until its new casino floor debuted.

But while wagering is on the rise, both casinos are keeping a wary eye on economic conditions that affect their patrons’ pocketbooks and confidence.

“We have as many customers as we thought we would have,” on average more than 9,000 a day, said Downs chief executive Robert “Bobby” Soper. “The reality is they’re just spending less.”

Because the casinos are new, executives at both say it’s hard to tell exactly how much the plunging stock market and rising unemployment rates are reducing their volume of business.

“Where would we be if not for the current economic situation? There’s no real baseline to go back and compare,” said Mount Airy spokesman Pete Peterson.

“It’s a little challenging (to judge) because the circumstances of the economy are so much different,” Soper agreed.

David G. Schwartz, director of the Center for Gaming Research at the University of Nevada Las Vegas, said it takes time for a casino to develop a reliable customer base.

“A lot of it has to do with player marketing,” he said, giving the example of someone from Scranton who has been a steady player in Atlantic City. “They’ve got to somehow get that person to go to Mount Airy or Pocono Downs.”

The principal way casinos do that is through their loyalty programs, which are analyzed constantly to identify likely frequent gamblers. “You can’t just send out a mass mailer,” Schwartz said, “because then you’ll get a lot of freeloaders.”

Mount Airy got off to a slow start going into the cold months when bad weather can occasionally keep players at home. “We had a difficult opening period,” Peterson acknowledged. But now, “we’re getting some of those people (who used to frequent Atlantic City).”

He said the past few weeks have been among the best since the casino opened.

While Mount Airy seeks to attract customers from northern New Jersey and the New York City area, Mohegan Sun at Pocono Downs is drawing from the opposite direction. “We are seeing more customers from further distances,” he said, including Binghamton and north-central Pennsylvania.

The new casino’s restaurants, bars and shops may be helping to lure a particular type of visitor. “Our bus business has grown quite a bit,” Soper said, doubling to about 10 a day.

Both casinos use frequent promotions to maintain customer traffic, with the Downs holding its final Bushels of Cash drawing today. In November it will repeat a successful promotion from last year that may be an even bigger hit in an uncertain economy; giving away grocery gift cards.

Ron Bartizek, Times Leader business editor, may be reached at 970-7157.