The Midwest: First the good news …

Casino revenue in the Buckeye State vaulted 56%, as several new racinos came on line. The not such good news is that Ohio casinos are merrily cannibalizing themselves, down 16% on a year/year basis. Hollywood Columbus, in particular, continues to struggle, posting a lowly $128/slot/day. The most robust performance was a $17 million gross at Horseshoe Cleveland, but that must be set against a 19.5% reduction in winnings, as customers took their business to nearby racinos. No comparison was available for relatively new Horseshoe Cincinnati but Penn National Gaming properties missed Deutsche Bank estimates. Hollywood Columbus lost 16% of its business and Hollywood Toledo was off 19%. Nearby racino Scioto Downs, by contrast, only missed by 4%. Judging by the carnage that the incursion of racinos has caused, you almost have to wonder if Gov. John Kasich set up his state’s casino industry to fail. It’s certainly a market where supply has far outrun demand.

Both Penn properties missed J.P. Morgan estimates by double-digit margins, partly caused by closures brought on by inclement weather. However, there has been a steady march of new racinos: Thistledown Racino (April), Miami Valley Racino and Hard Rock Racino (both December). In other words, the Ohio casino industry is growing at an unsustainable pace. Those companies that doubled down on casinos and racinos are now licking self-inflicted wounds … or soon will be.

Ohio, however, might soon pass Illinois, which remains in freefall, off -14% last month. Penn National had a terrible month, averaging an 18% from its three casinos. Boyd Gaming‘s Par-A-Dice was also dealt an 18% blow while Grand Victoria was leaking revenue at a 20% clip. Caesars Entertainment’s two riverboats averaged a 15% decline. Casino Queen (-9%) and Rivers Casino (-6%) achieved some sort of weird moral victory by keeping their declines within single digits. And to think that there are those in Springfield who think this is the moment for five new casinos and two slot parlors. “Sponsors say gambling expansion would provide an estimated $400 million to $1 billion a year in revenue,” reports The Associated Press. Those sponsors must be snorting some really good “happy dust.”

Iowa‘s plethora of casinos were down 4% for the year. Due to the smallness of many of their revenue bases, the volatility of the results can be quite staggering, as when Isle of Capri Casino reports a 20% decline on revenue of $1.6 million. Pinnacle Entertainment and Caesars Entertainment beat Carlo Santarelli‘s estimates but Boyd Gaming’s two riverboats came up short. Caesars was the big winner, up 4% at its racino and 19.5% at Harrah’s Council Bluffs. Directly southward, in Missouri, revenues went south by 7%. So pessimistic were J.P. Morgan analysts that a 14% decline at Lumiere Place actually exceeded revenue projections.

Pinnacle St. Charles lost less business (-8%) and outgrossed its immediate rival, Hollywood St. Louis, $19 million to $17 million. River City was relatively stable, down 2%. The same might be said of Harrah’s North Kansas City, off 1% in a market that was otherwise hurting: Argosy Riverside (-8%), Isle of Capri Kansas City (-10%) and Pinnacle Kansas City (-9%). Only Lady Luck, down in Carruthersville, had a revenue-positive month, up 3%.

And finally there was Indiana. If deductions for free play are counted as revenue, the Hoosier State was down a staggering 21%, even with one extra weekend day. New Ohio competition absolutely hammered Penn’s Hollywood Casino Lawrenceburg, down 46%. (No, that’s not a typo). Rising Sun was setting, down 39% and Belterra also sustained a harsh blow, declining 31%. Casino Aztar, in safely distant Evansville, was up 6%, while all other southern Indiana casinos recorded downturns. Northern riverboats suffered some harsh declines but it’s hard to know who to blame, what with category-killing Horseshoe Hammond off 13%. Throw in dropoffs at Pinnacle East Chicago (-18%), Blue Chip (21%) and Majestic Star (-35%), and one is forced to conclude that customers are simply staying home, continuing a troubling trend for the industry in almost all markets not named “Las Vegas.”