Pennsylvania helps reverse national decline in casino revenue

In the gaming galaxy, Pennsylvania emerged as a bright star last year, helping to boost revenue among U.S. commercial casinos 0.9 percent to $34.6 billion after two straight years of decline, according to a report released Wednesday.

"There's no question the last several years have been challenging for the commercial casino industry," said Frank J. Fahrenkopf Jr., president and chief executive officer of the American Gaming Association in Washington, which released the study. "This year's . . . report confirms that there's good reason to be optimistic about the future of gaming."

Fahrenkopf discussed the report during a conference call Wednesday with gaming writers from across the country, and the commonwealth's explosive growth was a key topic.

"The expansion was clearly Pennsylvania," Fahrenkopf said. "That has been the state that has affected the entire Northeast, including Connecticut. It started out with only slots and now has table games."

Florida and Pennsylvania had the largest revenue increases last year. The 51.9 percent growth in Florida, which has five racetrack casinos with slots, was driven by the opening of one casino and the first full year of operation for another.

Casino revenue in Pennsylvania increased 26.4 percent from 2009 to $2.49 billion, and employment was up 38.8 percent to 12,664 casino jobs. Philadelphia and Pittsburgh cracked the top 20 for U.S. casino markets based on revenue.

With Parx in Bensalem and Harrah's Chester Casino & Racetrack, the Philadelphia region overtook Yonkers, N.Y., as the top racetrack casino market in the country. Parx and Harrah's Chester led the state in gross slots revenue last month and fueled its 8.3 percent slot-machine revenue growth over April 2010, according to the Pennsylvania Gaming Control Board.

New Jersey, meanwhile, with its 11 gambling halls in Atlantic City, posted the largest revenue decrease among U.S. markets last year, down 9.4 percent, from $3.94 billion to $3.57 billion. Other states reporting revenue declines were Illinois, 4.2 percent; Louisiana, 3.7 percent; Mississippi, 3.2 percent; and West Virginia, 3.1 percent.

With less money in the coffers came a loss of jobs in those markets. Employment at Atlantic City casinos declined by 2,232 jobs, or 6.1 percent, to 34,145 last year.

Sinking revenue was the impetus behind a state takeover initiated by Gov. Christie to help turn the Shore resort's fortunes around.

Fahrenkopf said he supported the Republican governor's efforts.

"From our perspective, we have to realize the great difficulty that the casinos and the city of Atlantic City have been going through from the time the first slot machine appeared in Pennsylvania," he said. "Now, with table games appearing in Delaware, it was very important that something had to be done."

"It's not easy to take the jurisdiction of the city and the state and integrate them," Fahrenkopf added, "but I am very hopeful."

The gaming association's 13th annual report contained national and state-by-state economic-impact data, including gaming-tax contributions and employment, but did not provide data on tribal casinos in the United States.

Rather than tally them separately, this year's report included states with only racetrack casinos - Delaware, Maine, and Rhode Island - in the commercial-casino sector alongside land-based, riverboat, and dockside casinos.

The U.S. casino industry employed 340,564 last year, paid wages of $13.3 billion, and contributed nearly $7.6 billion in direct gaming taxes to states, the report said.

In a poll of Americans by the gaming association in February, 31 percent said they had visited a casino in the last 12 months, 25 percent said they had gambled while there, and 88 percent said they had set a gambling budget before arrival - demographic data included for the first time in this year's report.

Two factors could affect revenue for 2011, Fahrenkopf said: rising gas prices and the still-high national unemployment rate, currently 8.8 percent.