Surrounding states gain as West Virginia loses

WHEELING – Things are looking up for most of the nation’s commercial casinos, as gambling revenue increased by nearly 5 percent to $37.3 billion last year, according to the annual survey of casinos by the American Gaming Association.

“By almost all measures, our industry is expanding and growing, which is good news for our employees and the communities where they live and work,” said Frank Fahrenkopf, the association’s president.

However, much of the profits gained in states such as Ohio and Pennsylvania come from customers who are bypassing Wheeling Island Hotel, Casino and Racetrack and Mountaineer Casino, Racetrack and Resort in West Virginia.

Revenue at Mountaineer dropped 15.8 percent in the last three months of 2012 compared to the same period in 2011. Simultaneously, Mountaineer’s parent company, MTR Gaming Group – which operates newer casinos in Ohio and Pennsylvania – saw company-wide revenue increase 12.2 percent.

At the Wheeling track, once profitable table gaming is now a liability, as officials there said the casino is on pace to lose about $1 million to run poker, craps, roulette and blackjack this year. That projected operating loss does not include the $2.5 million annual fee Mountain State tracks must pay the West Virginia Lottery Commission in July to have the table games. A major difference between 2012 and 2013 is that the Hollywood Casino Columbus opened in the fall, taking away some of Wheeling’s loyal customer base.

Since Mountaineer, Wheeling Island and West Virginia’s other two racetracks – the Mardi Gras West Virginia Casino and Hotel (formerly Tri-State Racetrack) near Charleston and the Hollywood Casino at Charles Town Races in the Eastern Panhandle – began table gaming, Ohio and Pennsylvania have established slot machines and table gambling.

Mountaineer and Wheeling Island traditionally have drawn large numbers of customers from Pennsylvania. However, with the opening over the last few years of the Rivers Casino in downtown Pittsburgh, the Meadows Casino near Washington, Pa., Presque Isle Downs & Casino in Erie, Pa., and other Keystone State facilities, it is more difficult for the West Virginia tracks to gain customers from there.

“Pennsylvania has been one of the great success stories of our industry in the last few years,” Fahrenkopf said.

There were 513 commercial casinos last year, up from 492 in 2011. Las Vegas remains the nation’s top gambling market, with more than $6.2 billion in revenue last year.

The report found that 15 of the 22 states that had commercial casinos last year saw gambling revenues increase, led by Kansas, Maryland, Maine and New York, each of which opened new casinos in 2012. Ohio became the 23rd state with a commercial casino last year.

New Jersey experienced the largest decline in casino revenue. Despite adding a 12th casino, Atlantic City’s revenues fell 8 percent last year to just over $3 billion. The city’s casinos continue to fight increased competition in neighboring states and were hurt by the after-effects of Superstorm Sandy, which kept some visitors away for months.

Casinos paid $8.6 billion in taxes to state and local governments last year, an increase of 8.5 percent. Employment at the casinos was down less than 1 percent, with about 332,000 people holding jobs. There were more than 853,000 slot machines in use at U.S. casinos last year, and casinos in Iowa and South Dakota derived more than 90 percent of their gambling revenue from slots last year.

More than 76 million Americans visited a casino last year. Fine dining is the most popular nongambling attraction for casino patrons, while more than a quarter of all casino patrons never or rarely gamble when they visit a casino.

Philadelphia remained the nation’s top racetrack casino market at $835.3 million. Resorts World at the Aqueduct Racetrack in New York City took in $672.5 million and Empire City in Yonkers, N.Y., took in $544.7 million.