MTR Gaming: Revenue Up Despite Competition

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MTR Gaming Group reported a 14.5% improvement in revenue in 2012 despite an increase in competition from other casinos, the company reported March 7 in its latest earnings report.

The company, which owns Mountaineer Casino, Racetrack & Resort in West Virginia, Presque Isle Downs & Casino in Pennsylvania, and Scioto Downs in Ohio, said total net revenue for 2012 was $490 million versus $428.1 million in 2011. Loss from continuing operations was $5.44 million last year, down sharply from $51.15 million the previous year.

The revenue increase was attributed to Scioto Downs, a Columbus harness track that began video lottery terminal gaming June 1, 2012. Income at Scioto Downs last year totaled $20.33 million; for 2011 the figure was $2.16 million.

Mountaineer and Presque Isle didn't fare as well, according to the financial statement. Net revenue at Mountaineer fell slightly from $224.1 million in 2011 to $222 million in 2012, while at Presque Isle, net revenue dropped from $201.1 million to $181.1 million.

"We continue to be pleased with the ramp-up of operations at our new Scioto Downs gaming facility, which generally exceeded our fair share of the Columbus slots market," MTR Gaming president and chief executive officer Jeffrey Dahl said. "Although our other regional gaming facilities continue to perform within our expectations, competition, weather, and overall weakness in consumer spending has had an effect on them."

Scioto Downs competes with Hollywood Casino Columbus, a full casino operated by Penn National Gaming Inc., while Mountaineer has three other casinos nearby, including one in West Virginia.

MTR Gaming officials noted the proliferation of "Internet cafes" that operate "sweepstakes machines" in Ohio. There is a debate whether the devices in the cafes are legal or illegal because they closely resemble VLTs or slot machines.

"These are good-sized properties, some of which have up to 150 units," Dahl said of the Internet cafes. "They are effectively mini casinos. I believe (the amount wagered through the machines) is measured in hundreds of millions of dollars."

On the pari-mutuel side, MTR Gaming reported revenue of $10.36 million, up from $10.2 million in 2011. Pari-mutuel expenses dropped from $11.41 million in 2011 to $11.08 million last year.

Officials said the company plans to spend $19 million—$2 million of which will come from a state fund—on capital improvements at Mountaineer that will "prepare us to help address the increased competition from Ohio."

Mountaineer and Presque Isle compete with Horseshoe Casino Cleveland, which opened last year. More is coming in the form of three racetrack VLT casinos in northeastern Ohio.