As Calder and Gulfstream shamefully duke it out on the racing front in South Florida this summer, I thought I’d take the opportunity to look at what has been happening on the gaming side of things. Six pari-mutuel facilities in Miami-Dade and Broward counties currently have slot machines, and two more are on deck.

 


Hialeah Park, which successfully fought for slot machines even though it was not an operating racetrack at the time Miami-Dade voters approved the measure in 2008, should be in the homestretch of its casino renovation. It is expected to open soon with more than 880 slot machines and a poker room.

 


About 22 miles north, Dana Jai-Alai may finally join other pari-mutuel casinos in Broward County – Boyd Gaming recently sold the facility to a group of Argentine casino owners. While Boyd had declined to develop a casino, the new owners are eager to apply their expertise in competitive markets to the Dania property; 500 slots could be in play by the end of the year.


“Competitive” is an understatement in South Florida. In addition to slot machines, the pari-mutuel facilities have poker rooms, but the proverbial 800-pound gorilla is the Seminole Hard Rock Hotel & Casino in Hollywood, one of several casinos operated by the Florida tribe.


Still, the pari-mutuel slot casinos seem to have held their own, and were likely impacted more by the opening of Casino Miami Jai-Alai in January 2012 than by anything the Seminoles threw at them. Over the past year, only the Isle Casino at Pompano Park, near the northern edge of Broward County and 20 miles from the closest pari-mutuel casino, escaped the double-digit year-over-year declines often experienced by the other established casinos. And yet the Pompano facility is by no means alone in its immediate market, being just 7 miles from a Seminole Casino in Coconut Creek.


With the addition of Casino Miami Jai-Alai, the total monthly slot machine revenue at all properties has increased year-over-year in all but two of the past 29 months covered in this analysis. Total revenues were down in February, due to the extra leap day last year, and also down slightly in March. They rebounded in April and May, with Isle Casino at Pompano in particular doing quite well compared to last year. Casino Miami Jai-Alai has posted double-digit monthly gains every month this year, still benefitting from its “new” status in the market. See the monthly revenue trends at each facility.


These monthly trends are interesting. On the surface it looks like the Miami-Dade properties are less impacted by the seasonal nature of the market than the others. Looking closer, both Calder and Magic City offer summer racing; Gulfstream and Mardi Gras do not (at least until Gulfstream began racing this month for the first time). However, the Pompano track offers racing year-round, and it is the one where seasonal trends are most dramatic.


The six pari-mutuel casinos combined generated $427.9 million in net revenue during calendar 2012, up from $381.7 million the previous year, or 12.1 percent. But among individual properties, only Isle Casino at Pompano managed to increase revenues in 2012. The other properties clearly felt the impact of Casino Miami Jai-Alai. As a result, you can expect further erosion once two new slot casinos are added to the same congested market, and it remains to be seen just how much room for growth there is. And keep in mind that while efforts to legalize full destination casinos have failed thus far, the casino lobby is strong and legislators will revisit gambling policy in the next session.


The following table summarizes operations in recent years. The year-to-date 2013 figures represent revenues through May with a comparison to the same period last year. Dollar values are in millions.

 

  2010 2011 %Chg 2012 %Chg YTD13 %Chg
Calder  $60.8 $76.2 25.4% $72.4 -4.9% $32.0 -1.0%
Gulfstream  51.2  55.0  7.5%  50.9  -7.6%  24.1  -7.8%
Magic City  64.6  79.3  22.8%  76.8  -3.1%  33.1  -3.9%
Mardi Gras  49.7  55.5  11.6%  53.1  -4.3%  24.0  -6.3%
Miami JA        53.0    28.1  39.7%
Pompano  102.9  115.7  12.5%  121.7  5.2%  59.1  5.6%
Total  $329.1  $381.7  16.0%  $427.9  12.1%  $200.4  3.0%