PA Report: Live Racing Boosts Slots Revenue

Live racing helps increase slots play in Pennsylvania, according to new report.

Horse racing at Pennsylvania racetracks is helping casino companies make more money on slot machines, according to one piece of information in the Pennsylvania Gaming Control Board’s 2009 report on racetrack gaming in the state.

Another statistic in the report, now in its third year, shows on-track pari-mutuel handle on live racing increased 2.35% from 2008 to 2009 despite an overall 11.07% decline in handle at all wagering outlets in Pennsylvania.

The PGCB released the benchmark report April 15.

“The 2009 report continues to show trends that began in 2006, with the opening of the first slots facility, that include an increase in the number of horse races, an increase in the amount of funds for purses, and an increase in slots play on racing days,” PGCB member and agriculturalist Gary Sojka said in a statement. “All of (that) demonstrates that the Pennsylvania Race Horse Development and Gaming Act (of 2004) is having a positive impact on the horse racing industry and agriculture in the Commonwealth.”

Gross terminal revenue for all slots casinos in Pennsylvania increased 21.6% from $1.62 billion in 2008 to $1.96 billion in 2009. A few new non-racetrack slots facilities opened in 2009, but the figure is somewhat surprising given the economic downturn and revenue declines in other casino jurisdictions.

Philadelphia Park Casino & Racetrack (Parx Casino) led the way with $359 million in gross revenue last year, or 18% of the total in the state. Harrah’s Chester Casino and Racetrack, also in the Philadelphia market, was second at $316 million, or 16% of the statewide total.

Total slots distributions to the Pennsylvania Race Horse Development Fund increased 21.58% from $193.9 million in 2008 to $235.7 million in 2009, according to the PGCB report. Purses earned $188.6 million; the Thoroughbred breeding fund $18.2 million; the Standardbred breeding fund and related sires stakes program $19.4 million; and health and pension benefits for horsemen $9.4 million.

Around the country it has been proven slots traffic doesn’t help pari-mutuel handle, but the PGCB report indicates live racing helps slots play in Pennsylvania.

On weekdays, gross terminal revenue from slots at racetrack casinos averaged $629,510 on live race days and $546,096 on non-live days. On weekends, the comparable figures were $932,041 on race days and $879,582 on non-live days.

Total purses earned—from slots and pari-mutuel sources—increased 14.63% from 2008 to 2009, the report states. Purses totaled $230.5 million in the state last year; that’s an increase of 311.81% since 2006, when the first slots parlors began operating.

Live on-track handle at the six racetracks in Pennsylvania was $44.7 million in 2009, up from $43.6 million the year before. Account wagering produced $12.7 million in handle last year, down 8.42% from 2008.

Off-track handle in the state in 2009 totaled $20.1 million, down 8.5% from $22 million in 2008. Interstate export handle for all Pennsylvania tracks totaled $644.1 million last year, up 6.37% from the previous year.

The breed breakdown is as follows: Total Thoroughbred handle in Pennsylvania was $588.7 million in 2009, down 10.52% from 2008 and down 24.29% from 2006; total harness handle was $145.1 million in the state last year, down 13.21% from 2008 and 26.41% from 2006.

The benchmark report doesn’t include a handle breakdown by track. It does show, however, that average daily handle on live racing is decreasing despite an increase in racing days.

PGCB chairman Greg Fajt said the report reflects some positive results, but improvement is needed.

“No one can doubt that the injection of hundreds of millions of dollars from slot machine play into the horse racing industry has rescued tracks from closure and saves thousands of jobs,” Fajt said. “At the same time, some amendments to the gaming act approved this year by the legislature recognize the importance of promoting the racing industry by requiring each (racetrack) to report how they plan to promote live racing, and increase both the live handle and daily attendance at the licensed racetrack on a yearly basis.”

The racetrack accountability provision is part of the amended legislation, which now authorizes table games at casinos in Pennsylvania. Purses will earn no revenue from games such as blackjack, poker, and roulette.