Ohio casinos, racinos enjoy a winning streak

Mild weather helps boost strong fourth-quarter numbers statewide

Fears of an oversaturated gambling market in Ohio may be subsiding after a strong finish in 2015 by the state’s casinos and racinos.

Buoyed by a robust final quarter, the 11 casinos and racinos brought in revenue totaling $1.64 billion last year — the first full year that all of the gambling businesses were open. Total revenue in 2014 was $1.46 billion.

“That doesn’t say ‘saturation’ to me,” said Alan Silver, a gambling industry expert and professor at Ohio University. “Once an industry reaches maturity there’s a slow, gradual decline, and it hasn’t really declined yet, so it could still be in a growth stage.”

The seven racinos combined for $831 million in revenue last year; the four casinos cleared $812 million.

Mild December weather certainly gave the state’s gambling industry a boost, but a closer look at revenue figures may be more telling. The racinos’ combined revenue in the final three months of 2015 was up 9 percent over the same period in 2014. The casinos reported a modest 3 percent boost.

"The database and the player lists are maturing so they're able to build loyalty and that keeps players here in Ohio," Silver said. "The trick is getting them in the door."

Miami Valley Gaming near Monroe had a huge December with more than $11.1 million in revenue, its second-highest total since opening in December 2013 and a $1.5 million improvement over December 2014.

Hollywood Gaming at Dayton Raceway reported $7.5 million in revenue in December, the second-highest total in the racino's 17-plus months of operation.

For the calendar year, MVG cleared $123.7 million and Hollywood Gaming, a smaller operation, had net winnings of $85.8 million.

‘Extremely happy’

Domenic Mancini, who has been general manager at Miami Valley Gaming since June, is encouraged by the momentum in southwest Ohio, which is home to three racinos and a downtown Cincinnati casino.

“If you had asked me (about saturation) three quarters into the year, I’d have told you it looks pretty flat, if not declining. This fourth quarter showed us some different things,” he said. “Everyone has done better. It’s a maturing market, no doubt about.”

The racinos are regulated by the Ohio Lottery.

“They’re extremely happy with what the VLTs (video lottery terminals) are doing,” said Silver, who met with lottery officials in October.

The state’s seven racinos are taxed at 33.5 percent with most of that money earmarked for education. In fiscal year 2015, which ended in June, the racinos brought in $259 million for education.

“We’re pleased by the strong growth we’ve seen,” said Ohio Lottery spokesperson Marie Kilbane. “As Ohio’s racinos grow in understanding customers’ preferences and the economy improves, we hope to see this trend continue.”

The Horseshoe Cincinnati casino reported revenue of $17.7 million last month, its best showing since March 2014. Spokesperson Shannon Mortland credited strong promotions and mild weather.

“When the weather is nice during the holidays, it makes people want to get out and have fun with family and friends,” she said.

The average December temperature in Dayton was 43.7 degrees — 12.5 degrees above normal, according to StormCenter 7 meteorologist Rich Wirdzek. The average temperature in December 2014 was 35.3 degrees.

The Cincinnati casino had $196.5 million in revenue for the year, third among Ohio’s four casinos.

The state’s worst-performing racino — Belterra Park in Cincinnati — reported net winnings of more than $5.9 million in December, a year-over-year increase of $1 million.

Racing on Saturday

One of the big entertainment draws for racinos — which offer only slot machines — is horse racing. The harness racing season at Miami Valley Gaming begins Saturday and features 86 race days through May 8. Mancini said the total purse will increase by 30 percent this year.

“We have more bodies on property because of racing,” Mancini said. “We have yet to see a real big bleed-over into VLTs because of racing, but that’s not to say our food and beverage don’t go up because of racing, because they do.”

Mancini said Miami Valley Gaming averaged about 4,000 customers per day last year, with a high of about 20,000 on May 2 — Derby Day.

The Hard Rock Rocksino in Northfield had the state’s best December with $18.9 million in revenue — its all-time high. The top casino was the Horseshoe Cleveland with $18.8 million.

The state’s four casinos are taxed at 33 percent. A total of $266 million in casino taxes was collected last fiscal year.

Midway through fiscal year 2016, which will end in June, the casinos are outperforming the state’s forecast, which was downgraded last year. Casino revenue in the past six months was $403.1 million; the updated forecast had predicted $359.8 million.

“The forecast had assumed that casino revenue would continue dropping, as it was at the time that the forecast was made,” Ohio Office of Budget and Management spokesman John Charlton wrote in an email. “However, casino AGR (adjusted gross revenue) in the first half of FY 2016 has actually increased slightly (0.9 percent) from the first half of FY 2015.”

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