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Thursday, November 12, 2009

So That's Why They Want to Build Another Casino

Posted By on Thu, Nov 12, 2009 at 11:53 AM

click to enlarge IMAGE VIA
Apparently casinos are extremely profitable endeavors-- even when there are six of them (soon to be seven, possibly eight) in one metropolitan area.

The Business Journal reported yesterday that St. Louis-area casino revenue jumped ten percent in October.

Here are the numbers:
• Las Vegas-based Pinnacle Entertainment's Lumiere Place saw October revenue of $17.9 million, up 41 percent from $12.7 million in October 2008.

• Pinnacle's President Casino saw revenue in October of $1.9 million, down 9 percent from $2 million last October.

• Ameristar Casino in St. Charles saw its revenue increase 7 percent last month to $23.8 million, compared with revenue of $22.3 million in October 2008.

• Harrah's Casino in Maryland Heights reported revenue of $25.4 million last month, up 9 percent from $23.2 million in October 2008.

• Argosy Alton reported revenue of $6.7 million in October, down 8 percent from $7.3 million in October 2008.

• Casino Queen in East St. Louis reported October revenue of $11.8 million, down 3 percent from $12.2 million last October.
As you can see, the only two places where profits decreased are on the Illinois side of the river, a nice bit of fodder for those seeking to keep the casino exemption in the recently passed city/county smoking ban.

But what's going to happen to those profits when Pinnacle's new River City Casino in Lemay opens up in Spring 2010? Or if the Riverview Casino in North St. Louis County gets the go ahead?

Let's take a look at a study recently done in Philadelphia, a city which is in a similar situation.
Philly has four major casinos and there has been fierce opposition to expanding that number, including a proposed law in the state legislature that would have required casinos to inform each gambler of his monthly winnings and losings (it failed by two votes) and increased measures to treat compulsive gamblers.

Leading the anti-casino charge is a not-for-profit group called Casino-Free Philadelphia. Last month they issued a report called "Snake Eyes: All Odds Are Against the Philly Casinos," detailing casino failures elsewhere in Pennsylvania.
The report draws concerned residents' attention to "market saturation" in the Philadelphia area and beyond. Both Chester City in Delaware County and Bensalem Township in Bucks County are home to casinos that will likely continue to draw many gamblers from the suburbs and the outskirts of the city. That may not leave sufficient gamblers to provide revenues to Philadelphia's new facilities.

Casinos in other areas of the state have experienced their own problems with market saturation. The state expected Rivers Casino in Pittsburgh, for instance, to take in $265 per day per slots machine, although the establishment is now taking in an average of about half that much.

"The writing is on the wall for these casinos," Jethro Heiko, a founding member of Casino-Free Philadelphia, said in a statement. "The market and the economy are working against casinos all over the country, but here in Philadelphia casinos face an even bigger competitive disadvantage. Here they will face protests, de-propagandizing and consistent opposition from the people of Philadelphia."
If that's not enough, this headline from March sums up the situation nicely "Casinos Shocked as People With No Money Stopped Gambling."

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