Gambling revenue
Gross revenue reported by regional casinos and racinos for September (money after winnings paid, but before taxes paid to state at rate of 33 percent for casinos and 33.5 percent for racinos):
September revenue
Horseshoe Cincinnati (casino): $16.2 million
Miami Valley Gaming (racino): $9.1 million
Hollywood Gaming (racino): $6.2 million
Belterra Park (racino): $3.9 million
Sources: Ohio Casino Control Commission, Ohio Lottery
The honeymoon period for Dayton’s new racino appears to be over as its September slot-machine numbers fell in line with state averages for money won per day.
Hollywood Gaming at Dayton Raceway reported $6.2 million in net winnings last month as its 1,000 machines averaged $207 in winnings per day for the business — just one dollar more than the state average of $206 at Ohio’s seven racinos.
The north Dayton racino,which opened Aug. 28 and netted an impressive $1.8 million in its first four days, could get a bump this month with the debut of live harness last weekend.
“The response was tremendous; it was a packed house,” racino general manager Gary DeWitt said. “There was a lot of energy. Before live racing we had simulcasting, but live racing just brought in a much bigger crowd. We’re hoping that continues.”
Hollywood Gaming’s opening likely affected the bottom line at Miami Valley Gaming in Warren County. The Turtlecreek Twp. racino reported $9.1 million in winnings, its lowest total since February. MVG’s 1,578 slot had the highest payout percentage — 92.08 percent — of any racino in Ohio last month.
“We’re impacted by two things: Part of it is seasonality and part of it is there’s another entrant in the market,” MVG general manager Jim Simms said. “When you have competition everyone’s share gets affected — it’s just a reality of the marketplace. We knew the competition was coming and have done our best to put our stake in the ground.”
MVG’s win per machine per day was $193, its lowest since January. The statewide average in September 2013 was $229. For casinos, the average was $173.
Statewide, racinos had $60.6 million and the four casinos reported $63.3 million in adjusted gross revenue, which is money left after winnings are paid to customers. Together, the four casinos were not as profitable last month as they were in September 2013 ($68.9 million) or August 2014 ($70.8 million).
Daniel Holmes, a gaming expert for RubinBrown, a business consulting and CPA firm based in St. Louis, says the dip in September numbers was no surprise.
“It is a slower month for gaming. The way we look at it, it is back-to-school season,” Holmes said. “We’ll see it come back up in the October-November time frame then taper off toward January.”
Casinos vs. racinos
The introduction of racinos in Ohio has bit into the business of the state’s four casinos. Gamblers at the Horseshoe Cincinnati, a casino that opened last year, wagered $105.7 million in slots last month, leaving $9.3 million for the house. That “coin-in” total was dwarfed by the $176.8 million gambled on slots at the Horseshoe a year earlier, in August 2013.
“Our entrance into the market definitely had some impact on them, just as they impacted the southern Indiana casinos,” Simms said. “You’ll probably see some volatility over the next six months as things play out.”
Penn National Gaming, which operates the Dayton racino, opened Ohio’s seventh racino on Sept. 17 in Youngstown. That racino enjoyed a huge September with net winnings of $5.9 million in just 14 days.
At the other end of the spectrum was Belterra Park, a racino located in southeast Cincinnati. Its monthly total was $3.9 million and its average win per day per machine was $102 — by far the lowest of any racino.
“Ohio’s an interesting mix,” Holmes said. “At the racinos you tend to have a higher win per machine (than casinos), which is counterintuitive when you look at the industry overall. It’s more of a product of where the racinos are located, on the outer edge (of cities) or the suburbs.”
Revenue was down at all four city-based casinos, including the Hollywood Columbus, which reported $15.8 million in September. Its revenue in August was $18 million.
Horseshoe Cincinnati’s gross revenue was $16.2 million, nearly matching its July and August totals due in part to its decision to reduce free, promotional play by $919,000.
The Hard Rock Rocksino in suburban Cleveland topped all racinos with $14.6 million in winnings. The Northfield facility has 2,267 slot machines, more than three of the state’s four casinos.
Holmes said the key to staying profitable in the gaming business is diversifying so a business is “not just a box with slots.”
He said the introduction of gambling brought needed jobs and tax revenue to Ohio but acknowledged that the market in the southwest corner of the state is crowded.
“Is it going to be Atlantic City tomorrow? No,” he said. “Atlantic City going from 13 to seven casinos took decades to get to that point, and one recession to make it go bust.”
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