Georgia Gaming Market Assessment - Pennsylvania Treasury

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INTRODUCTION The Innovation Group was retained by the Pennsylvania Treasury to assess the past and future performance of the Pennsylvania gaming market, taking into consideration the gaming and net statewide tax revenue potential for the two undeveloped Pennsylvania gaming licenses—the proposed Valley View location and the former Foxwoods site in Philadelphia. Alternative locations throughout the Commonwealth were also assessed, keeping within the parameters of the exclusion zones as defined by existing Pennsylvania legislation. The analysis assesses the gaming revenue potential for each location as well as its net impact to state gaming revenues, that is, after impacts to existing Pennsylvania casinos are deducted. Proposed new competition in surrounding states is also included in the analysis, most significantly slot machine development in Baltimore and Anne Arundel, Maryland and casino and racino development in Ohio. The following table summarizes the results of the analysis, on the basis of net gain to statewide gaming revenues. Alternatives: Net Gain to PA Gaming Revenues (MMs) South York $153.99 Reading $124.75 Valley View $122.65 Chambersburg $106.59 W. Philly/City Line $98.43 Beaver Valley $98.27 Altoona $96.11 Port Jervis $95.56 Foxwoods Site $89.96 Valley View w/ Youngstown Impact $83.39 Johnstown $76.85 Williamsport $54.82 In the Eastern region, South York or Reading offers the largest net impact to the commonwealth. A western Philadelphia location would add approximately 10% or $10 million more in revenues than the Foxwoods site, but would still be considerably lower than developing in a less competitive location like South York or Reading. In the Western region, Valley View at the current time ranks high in net impact at $122.65 million. However, if a racino is developed in Youngstown, Ohio, the net impact from Valley View is diminished to $83.39 million. Racino development in Ohio has received legislative The Innovation Group Project #054-11 August 2011 Page 1
approval, which would place two slot-machine casinos in Cleveland’s southeast suburbs. However, the proposed re-location of Toledo’s Raceway Park to Youngstown has not been finalized. 1 In Central Pennsylvania, Altoona has the largest market potential. Although the facility’s market potential is limited, it would have a very small impact on existing Pennsylvania casinos, and thus the vast majority of its gaming revenues would be a net gain to the commonwealth. However, its financial viability is questionable given the $66.5 million license fee and effective gaming tax rate. 1 With state approval, racetrack owners can apply to move their tracks to either Dayton or Youngstown. However, it is expected that approval would entail significant re-location fees. The Innovation Group Project #054-11 August 2011 Page 2
Page 2 and 3: Pennsylvania Statewide Gaming Marke
Page 6 and 7: ECONOMIC AND DEMOGRAPHIC ANALYSIS A
Page 8 and 9: Pennsylvania Total Population Regio
Page 10 and 11: $54,000 $52,000 $50,000 $48,000 $46
Page 12 and 13: Employment Employment is a signific
Page 14 and 15: Impact of Recession: Regional vs. N
Page 16 and 17: are the only private companies in t
Page 18 and 19: Pennsylvania Wilds Vineyards, the L
Page 20 and 21: PENNSYLVANIA GAMING This section su
Page 22 and 23: Harrah’s Chester has become the s
Page 24 and 25: Philadelphia Market The following s
Page 26 and 27: for 1,700 cars. The first phase ope
Page 28 and 29: Mt. Airy Mount Airy Casino Resort i
Page 30 and 31: Western Region The Western Region c
Page 32 and 33: The Rivers The Rivers Casino is loc
Page 34 and 35: HISTORICAL SLOTS TRENDS AND SATURAT
Page 36 and 37: Number of Machines 30,000 25,000 20
Page 38 and 39: Number of Machines 25,000 20,000 15
Page 40 and 41: Slot Revenue ($MM) $1,000 $900 $800
Page 42 and 43: Slot Revenue ($MM) $700 $600 $500 $
Page 44 and 45: Western Region Presque Isle was the
Page 46 and 47: Pittsburgh Market The Pittsburgh Ma
Page 48 and 49: Population/Slot Supply Ratios Adult
Page 50 and 51: Statewide Machine Development: 2003
Page 52 and 53: Eastern Region Performance: 2003 Re
Page 54 and 55:
Poconos+BethSands: 2003 Report vs.
Page 56 and 57:
With an aggressive marketing and bu
Page 58 and 59:
Atlantic City currently offers appr
Page 60 and 61:
number of slots from 1998 to 2008,
Page 62 and 63:
to include a minimum of three games
Page 64 and 65:
Yonkers Gaming Performance Year Rev
Page 66 and 67:
Hollywood Casino and Ocean Downs Cu
Page 68 and 69:
West Virginia Statewide Table Perfo
Page 70 and 71:
Poker Revenue West Virginia Table P
Page 72 and 73:
gamer visits thus generated are the
Page 74 and 75:
The Innovation Group Project #054-1
Page 76 and 77:
The following table shows the rates
Page 78 and 79:
Baseline 2010 ($MMs) Eastern Alt. S
Page 80 and 81:
2014 Status Quo ($MMs) Eastern Alt.
Page 82 and 83:
The table on the following page sho
Page 84 and 85:
Location Alternatives As shown on t
Page 86 and 87:
limited individual potential, its i
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• LARGE o $250.0 million + in gam
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These were then input into a financ
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Georgia Gaming Market Assessment - Pennsylvania Treasury

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