Another thousand slot machines

Penn National Gaming — sort of a “favorite son” candidate for a Philadelphia casino — is first up in presentations to the Pennsylvania Gaming Control Board for the fifth Philly-area casino license. Bart Blatstein‘s and Isle of Capri Casinos‘ $700 million The Provence plays the afternoon session, with other contenders to be heard from Wednesday and Thursday. Blatstein is painting one of the rosier pictures of cannibalization, predicting that 50% of The Provence’s business will come from other casinos.

Spectrum Gaming Group, which conducted the study on The Provence’s behalf, foresees Market8, Live!Philadelphia and Casino Revolution taking about two-thirds of their business from other casinos, while 70% of Hollywood Casino‘s revenue would be siphoned from rival casinos. Of course, since Blatstein commissioned the study from Spectrum, you can argue that it found what he wanted it to find. Market8 (left) retorts that only 22% of its revenue would be “long pig,” compared to 31% cannibal fare at The Provence. Consulting firm PFK produced a reverse analysis of Spectrum, contending that any of the south Philadelphia casinos would generate 65% new revenue. Casino Revolution boasts it will produce 83% new revenue … the sort of pie-in-the-sky talk we’ve grown accustomed to hearing from Joseph “Tomato King” Procacci. Penn National Gaming predicts a 60/40 split of new and recycled customers.

Pressure from the PGCB to add more amenities to whichever new casino is chosen could be a blessing in disguise, prompting developers to provide facets that would incentivize new business. “Our gaming revenues are started to max out,” fretted PGCG member Gregory Fajt (left). (Actually, the numbers show that they maxed out some time ago, but there’s a thick barrier of denial surrounding this entire process.) Penn National says its top draw for gamblers will be convenience of access. That’s not going to cut it. However, Penn National’s two-phase approach — with another thousand slot machines and a hotel — is a sensible hedge against contraction in the marketplace.

It’s all over save for the licensing in Massachusetts. A brief presentation by Raynham Park to the Massachusetts Gaming Commission concludes public hearings. The MGC will now cloister itself for a month to choose a slot parlor operator. Commissions have to gamble, among other things, that a Greenwood Racing slot house in Raynham Park won’t cut into the tax contribution made by a theoretical, long-shot Mashpee Wampanoag casino in nearby Taunton. However, $227 million in investment, a complete set of surrounding-community agreements and 86% local approval are strong incentives for approval.