PA Group Continues to Warn of Revenue Decline
The Pennsylvania Equine Coalition, noting another monthly loss in revenue from slot machines at racetrack casinos, predicts an overall reduction of $17 million in the Pennsylvania Race Horse Development Fund for fiscal year 2012-13.
In addition, Republican Gov. Tom Corbett has proposed in his fiscal year 2013-14 budget to take up to $31 million from the RHDF to pay for other state programs. That would come as some funding is restored because of the sunset of an earlier diversion from the RHDF.
The coalition, which represents owners, breeders, and trainers in Pennsylvania, said March 5 that slots revenue from the six racetrack casinos in the state dropped 14.3% in February compared with the same month in 2012. That equates to a $3.47 million decrease in RHDF funding.
The group said the Corbett administration's most recent projections suggest the RHDF will have accrued $278.5 million in fiscal year 2012-13. The current 6.1% decline in slots revenue, however, would put the fund at about $17 million less, the coalition said.
The figures are based on weekly and monthly revenue reports prepared by the Pennsylvania Gaming Control Board.
"Revenues to the Race Horse Development Fund are down significantly due in large part to increased competition from the gaming industry in neighboring states," said Pete Peterson, spokesperson for the Pennsylvania Equine Coalition. "The revenue drops have already forced three Pennsylvania racetracks to implement across-the-board purse cuts.
"Unfortunately, the competition is not going away, so we expect these declines to continue. Looking at revenues over the past few months, it appears the declines are only growing worse."
Slots were legalized under a 2004 law designed in part to improve the economics of horse racing and breeding.
Peterson explained March 5 the RHDF actually gets the equivalent of 18% in gross terminal revenue from each racetrack casino—but the 18% is spread out over the current 11 casinos in the state. That averages out to 10.6% from each facility, he said.
"That's why the performance of the racetrack casinos is so important," Peterson said. "It is that figure that determines how much money goes into the Race Horse Development Fund."
In its monthly release, the PGCB said overall slots revenue dropped 9.15% in February, in part because there were 28 days in the month versus 29 in 2012, a leap year. When the comparison is for the 10 casinos that were open in February 2012 and 2013, the decline increases to 11.5%.
A breakdown of individual casinos shows that only the racetrack gaming facilities suffered double-digit declines in slots revenue in February, according to the PGCB. Presque Isle Downs & Casino took the biggest hit at 28.12%, followed by The Meadows Racetrack & Casino (13.97%), Mohegan Sun at Pocono Downs (13.88%), Hollywood Casino at Penn National Race Course (12.64%), Harrah's Philadelphia Casino & Racetrack (12.17%), and Parx Casino & Racing (11.54%).
The four non-track casinos that also were open a year ago experienced slots revenue declines of 3.55% to 9.69%.
The coalition said the continued decline in slots revenue at racetrack casinos is due to increased competition from casinos in Ohio, New York, and Maryland, as well as in-state competition from a casino in Valley Forge that opened in 2012.
Copyright © 2014 The Blood-Horse, Inc. All Rights Reserved.