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Pa.’s No.2, but maybe not for long

April 16. 2013 11:37PM

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PHILADELPHIA — The eighth annual Pennsylvania Gaming Congress kicked off with a cocktail reception at the Loews Philadelphia Hotel. But while the toasting is well earned, the cork popping might not last forever.

While many in the casino industry spent much of the Eighth Annual Pennsylvania Gaming Congress on Tuesday celebrating the state’s meteoric rise from hosting zero casinos in 2005 to now boasting the second highest casino revenues in the nation behind only Nevada, they warned there will be more competition.

Pennsylvania has leapfrogged New Jersey, Connecticut, West Virginia, Delaware and New York, all Northeastern states that had some form of casino gaming before the opening of the Mohegan Sun Casino at Pocono Downs in Plains Township as Pennsylvania’s first casino in 2006. But investments in facilities in some states have been made, and other nearby states, including Maryland, Massachusetts and Ohio, have taken a seat at the poker table.

Bill Ryan, chairman of the Pennsylvania Gaming Control Board, said all of those states “want the same thing. Keep their own residents from leaving the state.”

He said residents from neighboring states crossing borders to gamble have aided Pennsylvania’s casinos. But as those neighboring states have begun legalizing casinos, the border bleed has been stemmed somewhat. An example mentioned by multiple panelists throughout the day’s event referenced Presque Isle Downs Casino near Erie as a prime example.

Presque Isle Downs Casino, according to the latest revenue figures from March, continued to show declines as it faces new competition from just across the state line in Cleveland, Ohio, which saw a casino open last May. The Erie casino generated $1.3 million in gross revenue from table games last month, down 38 percent from $2.1 million during the same period the year before just prior to the Cleveland casino’s opening.

But it’s not just Presque Isle that has or will see heightened competition:

* Located in Hanover, Md., the Maryland Live Casino introduced dealer-staffed table games earlier this month. One of three operating casinos in Maryland, the hotel/casino reported $45 million in gross slots revenue in March. That ranks as the top casino in the entire Mid-Atlantic, more than $9 million higher than Pennsylvania’s top casino, Parx in Bucks County. Another pair of casinos is set to open over the next year in Maryland.

* In Ohio, four casinos are operating in the state’s largest cities: Toledo, Cleveland, Cincinnati and Columbus. Each has opened since Ohio voters chose to legalize casinos in 2009.

* Delaware, which is likely to be hurt the most by the one-two punch that Pennsylvania and Maryland have dealt it, has three racinos, meaning casinos operating at racetracks. There is also a poker room in Wilmington.

* Massachusetts Gov. Deval Patrick signed legislation in 2011 that authorizes three casinos and a slots parlor. Hearings among the nearly one dozen applicants have been ongoing and no licenses have been awarded to date.

Some border casinos, such as Harrah’s in Chester, The Meadows near Pittsburgh, Presque Isle and The Rivers in Pittsburgh, have seen revenues dip or become flat, and it’s these casinos that could be most affected by casino openings in Ohio and Maryland.

Mike Bean, the president and general manager of Mohegan Sun at Pocono Downs, said he believes some casinos, including his, should be insulated from major revenue decreases because of casinos in other states. For a place like Mohegan Sun at Pocono Downs, he said the main drawing area is Northeastern Pennsylvania, so the aim has been to market the casino locally and keep the area’s residents close to home.

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