Georgia Gaming Market Assessment - Pennsylvania Treasury

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limited individual potential, its insulation from other Pennsylvania casinos means that the large majority of its revenue potential would be a net gain to the Commonwealth. Central Region Alternatives Altoona Johnstown Williamsport Facility Gaming Revenue Potential $112,148,162 $97,643,835 $68,981,390 Net Gain to Statewide Gaming Revs $96,106,790 $76,850,412 $54,816,356 The Innovation Group Project #054-11 August 2011 Page 83
FINANCIAL ANALYSIS To determine if the locations identified can generate enough revenue to be viable and attract prospective developers to invest significant capital a top level financial analysis was prepared. To make this determination, we utilized several industry standard return metrics including Net Present Value (“NPV”), Internal Rate of Return (“IRR”), EBITDA Return on Investment and Payback Period. Methodology and Results Discounted Cash Flows (Net Present Value or NPV) The present value of future cash flows discounted at an estimated cost of capital and offset by the capital investments required by the project. � Finance experts widely agree that net present value is the correct measure in assessing mutually exclusive projects. � Projects with negative net present value do not offer an economic return. Projects with positive net present value are opportunities to consider. The greater the magnitude in either direction indicates the greater value of the project. � Net Present Value is generally sensitive to terminal values and the associated multiples. Internal Rate of Return (IRR) The discount rate often used in capital budgeting that makes the net present value of all cash flows from a particular project equal to zero. Generally speaking, the higher a project's internal rate of return, the more desirable it is to undertake the project. Pay Back Period The time period in which the positive cash flows of the project equal the cost or investment into the project. � Pay Back does not consider the time value of money, it does not discount any cash flows. � Pay Back literally indicates when you get your money back. For purposes of this analysis, the proposed locations were categorized according to five levels of revenue and size potential as follows: The Innovation Group Project #054-11 August 2011 Page 84
Page 2 and 3:
Pennsylvania Statewide Gaming Marke
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INTRODUCTION The Innovation Group w
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ECONOMIC AND DEMOGRAPHIC ANALYSIS A
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Pennsylvania Total Population Regio
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$54,000 $52,000 $50,000 $48,000 $46
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Employment Employment is a signific
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Impact of Recession: Regional vs. N
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are the only private companies in t
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Pennsylvania Wilds Vineyards, the L
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PENNSYLVANIA GAMING This section su
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Harrah’s Chester has become the s
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Philadelphia Market The following s
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for 1,700 cars. The first phase ope
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Mt. Airy Mount Airy Casino Resort i
Page 30 and 31:
Western Region The Western Region c
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The Rivers The Rivers Casino is loc
Page 34 and 35:
HISTORICAL SLOTS TRENDS AND SATURAT
Page 36 and 37: Number of Machines 30,000 25,000 20
Page 38 and 39: Number of Machines 25,000 20,000 15
Page 40 and 41: Slot Revenue ($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 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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