Today I wrap up what has been a week-long review of casino gaming in the United States with a look at how recent and new developments will impact the marketplace over the next several months. Some degree of economic recovery looks to have restored normal growth to a few markets, and you have to wonder if we’ve already seen the maximum impact from competition in some regions, so 2012 results could be quite different than recent years in many jurisdictions.
New markets: Ohio will be the busiest state in the country over the next 12 to 18 months. Casino gaming makes its long-anticipated debut in May when two casinos open, first in Cleveland and then in Toledo. The remaining two, in Cincinnati and Columbus, will open a few months down the road. And it doesn’t stop there. The state’s seven racetracks will begin opening casinos with video lottery terminals, subject to the final resolution of legal issues. Scioto Downs was the first to be licensed and is getting ready to open.
Massachusetts has also legalized casino gaming, but the process will clearly be a slow one and it may be well into next year before we start to see the fruits of the bidding process.
Major growth ahead: Annual gaming revenue in Kansas, Maryland and New York this year will soar compared to 2011, with the largest casinos in all three states having opened in the past few months or, in the case of Maryland, expected to open later this spring.
Maine could be poised for significant growth depending on the popularity of table games at the Hollywood Casino in Bangor, which made their debut in March, and the success of the new casino under development in Oxford, which has just received its license and is expected to open by early summer.
Continuing strong growth: Arkansas, Florida and Rhode Island should continue to post impressive revenue growth, as should Eastern Pennsylvania. New games have significantly boosted the revenues generated by electronic games of skill in Arkansas. A new slot casino opened in South Florida in January, increasing the market total. And there seems to be no stopping Rhode Island’s Twin River from near-constant growth in the coming months, given the length of time before competition from Massachusetts will hit. Table games are on the agenda if approved by voters in November. And finally, Eastern Pennsylvania should continue to do well, with the March opening of one additional casino in Valley Forge.
Illinois is expected to report healthy year-over-year increases each month until the anniversary of the new casino in Des Plaines in July. After that, the challenge will be for The Rivers Casino to keep its momentum, given that the rest of the industry in Illinois had been declining for some time.
There’s always hope: Nevada holds promise for a full recovery, with annual revenues up last year and six consecutive months of revenue increases through February.
Mississippi has been on a nearly steady decline, but enjoyed year-over-year growth twice in the last four months. The anticipated opening this year of the Margaritaville Casino in Biloxi could give a welcome boost to the Gulf Coast region.
In Louisiana, racetrack casinos have generally done better than riverboat casinos, and the New Orleans casino sagged last year before rebounding in the past three months. It looks like all three segments could do well this year, especially with new casinos on the horizon.
Casinos in Deadwood, South Dakota, seem to have felt most of the impact of a smoking ban, with revenue up by double-digits so far this year.
The biggest question mark is what the impact of Revel will be on Atlantic City. Will the new resort finally stop the decline in gaming revenue and increase the market, or will it just take market share from existing casinos? The casino has been open less than a month, so it will take a while for the impact to sink in.
Bracing for impact: Gaming operations in Michigan and parts of West Virginia and Pennsylvania will soon feel the pressure once the Northern Ohio casinos are up and running in May. Detroit’s three casinos are some 60 miles from Toledo; while the Cleveland casino will have some impact on Pennsylvania’s Presque Isle and West Virginia’s Mountaineer Park, each some 100 miles away.
A little further into the future, Southeast Indiana’s dockside casinos will face competition from the Cincinnati casino and racetrack casinos in Cincinnati and Dayton. And should Beulah Park complete the move from Columbus to the Youngstown area as planned, that puts a racetrack casino just 50 miles from Mountaineer Park, and about 70 miles from The Rivers Casino in Pittsburgh.
And finally, Connecticut’s two tribal casinos will have a couple of years to restore faith after near-constant declines before competition from Massachusetts hits.
Could go either way: The crystal ball is much cloudier in other jurisdictions. Several states could continue their steady pattern of minor increases most months, with the occasional dip, such as Iowa, Colorado, Missouri and New Mexico. Racetrack gaming in Oklahoma has enjoyed nothing but growth for some time despite the overwhelming tribal industry, and could continue to do well. And in the heart of the highly competitive mid-Atlantic region, Delaware has already faced the worst and recent months indicate it could be able to stem the decline.
One final comment – on top of all the bricks-and-mortar activity, there is the inevitable foray into Internet gaming. It has already made its debut on the lottery side in Illinois, and more lotteries could be online before too long. Just what will happen in the casino industry remains to be seen.
Part 1: Introduction
Part 2: Mature markets
Part 3: Newer markets
Part 4: Top revenue markets