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The Impact of Table Games on Pennsylvania Gaming Revenue

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To compete effectively with New Jersey, West Virginia and Delaware ... Estimate based on Effective tax rate as determined by the WV Lottery. Page 16. Revised Base ($M) ... – PowerPoint PPT presentation

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Title: The Impact of Table Games on Pennsylvania Gaming Revenue


1
  • The Impact of Table Games on Pennsylvania Gaming
    Revenue
  • Steve Rittvo, Chairman and CEO
  • The Innovation Group
  • June, 2009
  • Harrisburg, PA

2
  • Why table games in Pennsylvania?
  • Allows new PA gaming industry to realize its
    full potential
  • To compete effectively with New Jersey, West
    Virginia and Delaware
  • Incrementally increases slot revenue
  • Provides new and increased tax revenue
  • Creates over 16,000 new jobs
  • Creates 1 Billion economic output

Page 1
3
  • Agenda
  • Current and Proposed Landscape
  • The Impact of Table Games
  • Other Economic Impacts
  • Summary
  • Questions

Page 2
4
  • Current and Proposed Landscape

Page 3
5
  • Current and Proposed Landscape
  • Atlantic City, Pennsylvanias main competitor,
    has full scale casinos
  • Maryland could have up to 12,000 slot machines
  • NY will likely see 5,000 slots installed at both
    Aqueduct and Belmont
  • In Ohio, the Governor has proposed the
    introduction of slot machines

Page 4
6
Page 5
7
  • PA Gross Terminal Revenue continues to increase
    as more supply enters the market
  • With currently authorized competition from other
    states fully implemented gross terminal revenue
    for Pennsylvania projected to reach 3.2 Billion
    by 2012

Page 6
8
Proposed Legislation
  • Ohio
  • Constitutional Amendment for casinos to be
    located in Cincinnati, Cleveland, Columbus, and
    Toledo
  • Two additional bills being developed to expand
    gaming
  • West Virginia
  • Charles Town may add table games if local
    referendum approved
  • New York
  • Federal Legislation pending that can facilitate
    Native American Casinos in the Catskills

Page 7
9
  • The Impact of Table Games

Page 8
10
  • Major Assumptions
  • All twelve PA properties are operating
  • Terms and conditions of table games regulations
    similar to other major markets that offer table
    games such as Atlantic City and Las Vegas
  • 12 Gaming Tax
  • Operators will build out facilities to
    accommodate table games including adding
    additional amenities needed to be competitive
    with other markets

Page 9
11
Methodology
  • Reviewed experiences at select properties where
    table games were introduced in formerly slot only
    environment
  • Utilized results of Primary Research to build a
    base case
  • Table game scenarios used to project incremental
    slot play
  • Examined the split between slot and table revenue
    in other comparable jurisdictions

Page 10
12
  • Research into gaming habits identify "companion
    play" or slot players who will travel with table
    game players to casinos that offer both.
  • The data analyzed indicates the slot revenue is
    enhanced between 1.5 and 3.0 when table games
    are introduced
  • The market attributes of Pennsylvania justify an
    increase in slot play

Page 11
13
Page 12
14
Page 13
15
Page 14
16
  • Assuming 55 Slot Tax and a 12 Table Game Tax
    the Commonwealth would receive an additional
    164.9 million in gaming taxes

Page 15
17
Page 16
18
  • What Happens If Pennsylvania Stands Still?
  • Assuming out of state competition that has
    already been approved, 2012 Gross Terminal
    Revenue is projected at 3.2 Billion
  • If additional gaming opportunities currently
    being considered outside of Pennsylvania are
    approved, Gross Terminal Revenue decreases to
    under 3.0 Billion
  • Gross Terminal Revenue decreases by 202 Million
  • Gaming Tax implication is a decrease of 111
    Million

Page 17
19
Other Economic Impacts
Page 18
20
  • Direct Labor Associated with Table Games
    Operations
  • Market assessment projected 1,075 table games
    projected for the twelve Pennsylvania casinos
  • 10,100 jobs would be created to support the table
    game operation.
  • this would include dealers, supervisory
    personnel, casino cage, support staff, security
    and surveillance
  • Additionally implementation of table games will
    create the expansion of gaming facilities and
    additional related amenities
  • Hotels
  • Restaurants
  • Entertainment
  • Jobs associated with additional amenities not
    included in above number

Page 19
21
  • Direct Spending represents additional spending by
    the Casinos in PA, including salaries and wages,
    purchases (including cost of goods sold), and
    services
  • Induced Applies primarily to spending by
    patrons outside the casino coming from outside of
    the local market area and includes, ranging from
    convenience stores and gas stations to area
    restaurants and hotels.
  • Indirect spending is the result of the multiplier
    effect in the economy. A ripple of increased
    revenues and incomes is created that begins with
    purchases made by the recipients of the direct
    and induced expenditures.
  • Direct Spending represents additional spending by
    the Casinos in PA, including salaries and wages,
    purchases (including cost of goods sold), and
    services
  • Spending Categories
  • Direct includes salaries, wages, purchases and
    services
  • Induced is money spend by out of the area patrons
    in areas such as gas station and convenience
    stores
  • Indirect is the ripple effect created by the
    recipients of direct and induced spending

Page 20
22
Summary
Page 21
23
  • Why table games in Pennsylvania?
  • Stabilizes and increases Pennsylvania gaming
    revenue
  • Creates a significant new employment in the
    Commonwealth
  • Engender additional investment in Casino
    properties
  • Allow for the development of additional amenities
    such as hotels, dining and entertainment outlets
    which will create more economic benefits

Page 22
24
Questions
Page 23
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