Earlier this week, it was reported that Philadelphia is going to have yet another casino – the so-called Live! Hotel & Casino, which will be operated by Cordish Companies and Greenwood Gaming and Entertainment. This announcement, however, was not particularly welcomed by SugarHouse Casino’s executives, who stated that Pennsylvania already has way too many gaming venues.
The state’s Gaming Control Board regarded this argument as inconsistent. The regulatory body used the financial statement of SugarHouse as a proof to its claim.
According to Pennsylvania’s Gaming Board, the Philly-based casino generated daily the average sum of $299 out of every single of its 1,600 slot machines in the 2014 fiscal year. This is 25% more than the average amount all other gaming facilities within the state gained together.
The regulatory body issued a 174-page report on the reasons why it had decided to award license to Live! Hotel & Casino, so as for it to be built in the stadium district. The Gaming Board paid special attention to the turnover that SugarHouse gained from table games, played against the house.
According to the document, the afore-mentioned casino daily generated the average amount of $4,050 from the 61 tables it owns. By comparison, all other casinos within the territory of Pennsylvania won an average of $2,136.
As stated in the board’s report, SugarHouse Casino’s profits were mainly due to its being the only casino in Philadelphia. The high revenues that it generated throughout this fiscal year point to the fact that there certainly is demand for casino-related activities in the state. That is, Pennsylvania will only benefit from the establishment of yet another gaming facility.
Wendy Hamilton, currently general director of SugarHouse, pointed out that another casino will bring “devastating” consequences to the already licensed venues and to the community as a whole. Apparently, she is not the only one to be displeased with this particular turn of events.
Earlier this week, Deutsche Bank debt analyst Andrew Zarnett shared his comments on the topic in his report “This Town Ain’t Big Enough for the Five of Us.” According to him, another casino in the southeastern region of Pennsylvania will affect its rival venues in a quite negative manner.
Live! will be the fifth casino in the above-mentioned area. Currently, SugarHouse in Philadelphia, Parx Casino in Bensalem, Valley Forge Casino in King of Prussia, and Harrah’s Philadelphia in Chester are operating there.
When Valley Forge was launched, profits in Parx dropped by 3.7% and by 4.4% at Harrah’s.
Live! announced that it will most probably offer 2,000 slot machines and 125 table games to its visitors. In comparison, Valley Forge has only 600 slot machines and 50 tables at its premises. In other words, Live! Casino’s launch will bring disastrous consequences to gaming market, as Zarnett claimed in his report.
Regulatory bodies really needed to consider the opportunity that the already operating casinos might not be able to pay their debts, once the fifth venue opens doors. And both SugarHouse and Harrah’s currently have low credit ratings and large debts.
Yet, Pennsylvanian Gaming Board concluded in its report that the gambling market expansion might actually have positive effect on competition.
