Pennsylvania bill gives some, takes more; MGM discloses new plans

Pennsylvania‘s House of Representatives has passed a gambling-expansion bill that gives with one hand but takes away more with the other. The bill, which still must pass the state Senate would: legalize DFS, pending a 19% tax and $50,000 licensing fee; permit slot routes at bars (5 machines apiece) and truck stops (10 slots apiece), maxing out at 40,000 devices and taxed 41.5%; go online with the state lottery; legalize Internet casinos at a 16% tax rate; permit tablet gambling at airports, taxed at 36%; allow slots at OTBs, 250 apiece, taxed at 54%; and legalize sports betting, with an 18% tax.

Deutsche Bank analyst Carlo Santarelli hits the nail on the head when he describes the bill as “cumbersome.” It could also cause widespread alarm among casino operators to see so much competition legalized for the sake of rounding up another $250 million or more in taxes. The Senate version is more conservative, at least to the extent of excluding slot routes, and looks to raise only $147 million in taxes, tops. The jumble that is the House bill might be laid upon the failure of leadership from Gov. Tom Wolf (D), who has repeatedly called for more gaming revenue without specifying what he’d like to see.

* More convention space is on the docket for MGM Resorts International. In meetings with Wall Street analysts it announced — without formally announcing — more space at MGM Grand and eventually at Bellagio (probably in 2020). “Management is upbeat on CityCenter and sees the property generating strong cash flow going forward,” wrote JP Morgan analyst Joseph Greff, which I guess puts paid to speculation that MGM might try to monetize its half of the metaresort. In Macao, MGM will shift the bulk of its emphasis to mass-market players. Although MGM Cotai was designed with 500 tables in mind, management is now planning for 300. What the Macanese government will allow, of course, is always imponderable.

* It was good news for everyone in Ohio last month, where all the casinos and racinos were revenue-positive. Even Scioto Downs ($13.5 million) was up by tiny increments. Percentage-wise, Hollywood Austintown ($9.5 million) did the best, up 12.5%. In dollars, Hard Rock Rocksino ($21 million) left everyone in the dust, up 8.5%. The Dan Gilbert “Jack” brand may finally be gaining traction, with the Cleveland casino up 9%, to $17.5 million, and Cincinnati climbing 5% to $17 million. Thistledown Racino was up a modest 2% to $10 million. Belterra Park also eked out a 2% gain, to $7 million. Hollywood Casino Toledo rose 5% to $17 million, while Hollywood Casino Columbus had a more modest gain (4%) but a higher take ($18.5 million). Rounding out the GLPI portfolio, Hollywood Casino Dayton was up 11% to $8.5 million. We don’t know what occasioned this access of prosperity but will simply render our gratitude for it.