Georgia Gaming Market Assessment - Pennsylvania Treasury

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With an aggressive marketing and busing program in Cleveland, Presque Isle Downs (PID) has achieved revenues nearly 50% than projected. PID has nearly 500 more slot machines than projected. Presque Isle Downs Performance: 2003 Report vs. 2010 Actuals Projected 2006 Actual 2010 Difference Slot Revenues $113,790,574 $170,387,248 49.7% # of Slots 1,500 1,998 33.2% # of Facilities 1 1 0.0% WPU $208 $234 12.4% Source: PGCB; Innovation Group. The Innovation Group Project #054-11 August 2011 Page 53
COMPETITIVE ENVIRONMENT The following section describes the competitive environment for Pennsylvania facilities. Neighboring states such as New Jersey, Delaware, New York, Maryland and West Virginia all represent competition due to their proximity to Pennsylvania facilities and population centers. The Innovation Group has determined which properties in each state represent competition and summarized them below. New Jersey Atlantic City Although Atlantic City’s dominance as the largest and most mature gaming market on the East Coast has dwindled, it still remains as stiff competition to Pennsylvania facilities, given its proximity and attractiveness. Revenues for the market in 2010 totaled $3.5 billion, down from $3.9 billion in 2009. Revenue declined each year since 2005, largely due to increased competition in Pennsylvania and the economic slowdown. Slots accounted for $2.5 billion of the $3.5 billion in 2010 gaming revenue, or 69.5%. Slot win as a percentage of total revenue increased annually from 1990 to 2004, but then began to fall until 2009 when it saw a slight increase. Table win was relatively flat for the market from 1990 to 2003, averaging about $1.16 billion each year, but has experienced a spur in market revenue growth through 2008, averaging about $1.38 billion, possibly due to the introduction of Borgata to the market. This run up in table game revenue halted in 2009, when table revenue dropped 14% to $1.2 billion and then fell an additional 11% to $1.09 million in 2010. The current tax rate in New Jersey is 8% of gross gaming revenues as well as a community investment tax of 1.25% of gross gaming revenues, bringing the net tax rate to 9.25%. The graph below illustrates the trend in slot and table revenue as a percent of total revenue. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1990 1991 1992 1993 1994 1995 Atlantic City Gaming Win Breakdown 1996 1997 1998 Slot Table Source: New Jersey Casino Control Commission The Innovation Group Project #054-11 August 2011 Page 54 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Page 2 and 3:
Pennsylvania Statewide Gaming Marke
Page 4 and 5:
INTRODUCTION The Innovation Group w
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 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
Page 88 and 89: • LARGE o $250.0 million + in gam
Page 90 and 91: These were then input into a financ
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Georgia Gaming Market Assessment - Pennsylvania Treasury

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