Slot machines generated 64% of total purses in Pennsylvania in 2007.

Slot machines generated 64% of total purses in Pennsylvania in 2007.

Anne M. Eberhardt

PA Report: Purses Up, Handle Share Down

Pennsylvania purses are up, with more than 64% now coming from slot machines.

Total purses earned at Pennsylvania racetracks jumped 162% from 2006 to 2007 because of revenue from on-track slot machines, while the percentage of purses earned from pari-mutuel wagering dropped substantially during the same period, according to the Pennsylvania Gaming Control Board’s first “benchmark report” on the impact of slots on pari-mutuel wagering.

The report, which looks at pari-mutuel wagering in 2006-07, focuses on revenue from slots and the various indicators of pari-mutuel health such as purses, handle, and export of the Pennsylvania signal, which has become more popular in the simulcast marketplace.

“This first report is important because it establishes a baseline from which to compare subsequent years of pari-mutuel activity,” Melinda Tucker, the PGCB director of racetrack gaming, said in a statement accompanying the report. “Future reports, including next year’s, which will include complete figures for 2008, will provide a better and clearer picture of the future for horse racing in Pennsylvania, and the impact of slots gaming at those facilities.”

Purses earned at six Pennsylvania tracks—three Thoroughbred and three Standardbred—totaled $55,008,645 million in 2006, and $144,288,260 in 2007. The first slot machines began operating in November 2006 at Mohegan Sun at Pocono Downs, a harness track, and December 2006 at Philadelphia Park Casino & Racetrack.

In 2006, $52,932,992 in purse money—96.23% of the total—came from pari-mutuel handle, according to PGCB statistics. In 2007, handle produced $51,939,704 for purses, only 36% of the total. Slots revenue last year generated $92,348,556 for purses—64% of total purses paid.

Racetracks that had slots for all or part of 2007 are Philly Park and Presque Isle Downs & Casino (Thoroughbred), and Harrah’s Chester Casino & Racetrack, The Meadows Racetrack & Casino, and Pocono Downs (harness). Hollywood Casino at Penn National did open its slots casino until February 2008.

The PGCP report shows total handle in Pennsylvania (live and imported signals at racetracks, off-track betting parlors, and through account wagering) decreased 4.39% from $974.8 million in 2006 to $931.9 million in 2007. Thoroughbred handle dropped from $777.6 million in 2006 to $741.9 million in 2007, while Standardbred handle dipped from $197.2 million in 2006 to $190 million in 2007.

On-track handle on live racing held its own, though an increase in the number of race days played a major role. On-track live handle in 2007 was $40.9 million, down slightly from $41.3 million the previous year.

Of the $625.3 million in total handle on Pennsylvania racing last year, 80.4% came from out-of-state betting outlets, the report states. On-track accounted for 6.5%, off-track 3.8%, and account wagering 2.3%.

Not surprisingly for many tracks with slots and higher purses, export handle (to in-state and out-of-state outlets) is on the rise. It increased 10.8% ($493.7 million to $547 million) from 2006 to 2007.

Total race days increased 10.8%, from 756 in 2006 to 838 in 2007, while number of races increased 15% from 7,958 in 2006 to 9,153 in 2007.

Gross terminal revenue from slots totaled more than $1.03 billion in 2007, the report states. The top producers were Harrah’s Chester at $285,978,663, and Philly Park at $285,032,169. Both tracks are located in the Philadelphia metropolitan area.