PA Slots Keep Losing Ground While State Dawdles On Online Gambling

June 12, 2017
PA Slots Keep Losing Ground While State Dawdles On Online Gambling


The underlying problems of Pennsylvania’s land-based casino business are not going away while a host of other gaming measures — online gambling included — are being considered in the legislature.

The PA slot machine problem

Short of some sort of change, Pennsylvania slot machine revenue appears to be on the decline at worst, and on a plateau at best.

According to figures from the PA Gaming Control Board, slot machine revenue was down in May. It was down in the month 2.7 percent, or about $5.6 million ($203.25 million in May of 2017, compared to $208.85 million last May.)

In a vacuum or as a one-off, that might not seem like a big deal. However, it’s the eighth straight month in which slot revenue has been down. Unless someone in PA’s government or land-based casino industry is holding a magic wand, it seems unlikely that this trend will reverse itself without help.

Only increases in table games have helped casinos not realize year-over-year losses of late.

Meanwhile, the revenue situation in PA remains dire in terms of revenue for the state budget — with a projected shortfall of $3 billion. At the same time, it is faced with tax receipts from slot revenue that are not likely to grow and seem likely to contract.

That means it’s up to the legislature to do something about it.

PA legislature kicking the can down the road on gambling

The House and Senate have both passed large gaming bills. And both have online gambling in them.

But they remain very different, with the Senate uncertain to agree with the House on two major points:

The prospect remains that the two chambers don’t resolve anything and pass no gaming bill at all. However, a key member of the House says he believes common ground is attainable.

Will that happen? We don’t know. What we do know is iGaming can be an answer in PA.

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Online gambling remains a viable revenue generator

With the proper taxes and fees in place in a final gaming bill, online gambling can help the state’s revenue picture in a meaningful way, to the tune of hundreds of millions of dollars.

We also know that online gambling can help increase traffic in land-based casinos, and it won’t cannibalize revenue. That might even help turn around the slot slide.

The authorization of PA online casinos seems like a no-brainer given its potential good both from a bottom line and from helping sagging slot revenue. But will the House and Senate finally agree on a bill, and how the iGaming industry will look? The answer to that question will hopefully come later this month.

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