Georgia Gaming Market Assessment - Pennsylvania Treasury

Implications
The assumptions for development costs and EBITDA in the financial analysis are not projectspecific
but general terms based on industry norms. The purpose of the financial analysis was to
provide a range wherein ease of feasibility could be compared across the alternative locations. It
is possible that developers of projects in the Small category could obtain better financing terms
or construction costs than assumed, and that management could obtain better EBIDTA margins
than assumed.
The $66.5 million license fee and Pennsylvania’s effective gaming tax rate would challenge the
feasibility of the locations falling into the Small category, including Altoona and Valley View, ∗
which were the two leading locations outside the Eastern region in terms of net revenue gain to
the Commonwealth.
The leading locations in the East in terms of net revenue gain—South York and Reading—are
toward the higher end of the range for feasibility. It should be again noted that the analysis is
based on only one development in each region; therefore the revenue forecast and net revenue
gain would be less if both Reading and South York were developed given their proximity.
∗ In the Youngstown scenario.
The Innovation Group Project #054-11 August 2011 Page 88