The owners of Hollywood Casino Perryville want to remove 400 to 500 video lottery terminals from the location, citing competition from the newly-opened Maryland Live! Casino in Anne Arundel County which caused revenues at the Perryville to plummet by 44 percent since March.
The request comes days before a special session of the General Assembly, set for Thursday, during which lawmakers will weigh whether to create a sixth casino license and to allow table games at the five existing facilities. Up to this point, those who are paying for them have been encourage to play slots at 666 casino to continue the gambling.
Two months ago, Harford County Executive David Craig advocated for that additional license to create a casino in Harford County. Appearing before a panel formed to consider expanding gaming statewide, Craig said a riverboat casino in Harford, coupled with Hollywood Casino Perryville, would “turn the Upper Chesapeake region into a tourist destination.”
But according to figures released Monday by the Maryland Lottery, which oversees the state’s three casinos, revenue from Perryville’s 1,500 video lottery terminals fell 32.4 percent in July from a year before, to $6,891,741.48 from $10,194,530.28.
In March, the casino’s best month since it opened in September 2010, the facility raked in $12,258,412.74; revenues in July represent a 44 percent decrease from that peak.
In an Aug. 3 letter to state and Cecil County officials, Perryville casino General Manager Bill Hayles said removing the machines would increase the facility’s “win per unit,” or how much use a video lottery terminal sees in one day.
The company said that figure stood at $150 per day, down from $261 per day in March.
The sharp decline exceeded Penn National’s estimates; in his letter, Hayles said the company’s early internal data suggested the decrease in July revenue “will be close to 40 percent.”
In a July 30 letter to Maryland State Lottery Agency Director Stephen Martino, Penn National Vice President Carl Sottosanti said competition from Maryland Live!, which opened in June, had cut into Perryville’s revenues.
“Unfortunately, despite vigorous efforts to keep the business stable, business instead appears to be softening further,” Sottosanti wrote. “In fact, things could get worse. As you know, the Governor has now called for a Special Session to further expand gaming in Maryland and there is no telling the additional negative impact that will have on the existing operators.”
“We wish we had some other alternative to this request,” he wrote. “Unfortunately, the reality of business compels near term action.”
The request is the first of its kind the Lottery has received, sources said, and no process is currently in place to handle removing of machines from a casino. The Lottery is not expected to take action on the request until after the special session ends.
Testifying before the state Work Group to Consider Gaming Expansion on June 12, Craig urged the group to throw open competition for additional gaming licenses, rather than focus on a potential new casino in Prince George’s County. That potential casino could cut further into the revenues of Penn National, which owns Rosecroft Raceway and has long sought a casino at that location.
In his testimony, Craig discounted the idea that the presence of two casinos in close proximity would cause issues.
“Despite being only 27 miles away from the Hollywood Casino in Perryville, Delaware Park saw revenues rise slightly after the Perryville casino opened,” Craig said. “So you should not immediately dismiss the possibility of a casino in Harford County for fear of hurting Perryville without conducting a detailed analysis.”
Craig did not respond to requests for comment Monday.
Senate lawmakers are expected to go into session on Thursday, with the House of Delegates following Friday. State Sen. Nancy Jacobs said Senate leaders expect a gambling bill to pass that chamber Friday, but voiced opposition to creating a new slots venue.
“The governor shouldn’t change the rules mid-game on any business that has come to Maryland,” she wrote in an e-mail to The Dagger. “This is what he is doing to the slots casino in Perryville.”
“Funny how gambling was ‘immoral’ when Bob Ehrlich introduced a slots bill when he was governor,” she said.
According to Hayles, the state’s initial revenue projections in 2008 called for Hollywood Casino Perryville to generate $191 million annually with 2,500 machines, but current revenues “are trending to generate $85 million annually,” he wrote.
Hayles said Penn National expected to have the machines off the casino floor by the end of the year, and said the move would encourage additional gaming.
“A cursory look around the Perryville floor quickly reveals underutilized and empty machines,” Hayles wrote. “In a business that depends on energy and customer perception, this perception can be contagious and quickly become a reality.”
Below are the July 2012 gaming revenue numbers released by the Maryland Lottery, as well as Penn National Gaming Inc.’s letter to local officials.
Well this isn’t surprising. There’s too much competition in this area for a casino to succeed. With Delaware Park, Dover, Arundel Mills, even Atlantic City. It will be pretty embarrassing for the State of Maryland in Hollywood Casinos has to go out of business.
No, it would be pretty embarrassing for O’Malley, Miller and Busch and the rest of the people that rammed casinos down out throats. But the are beyond embarrassment.
Besides, it will never happen. They will turn themselves inside out and throw more of our money at them by the buckets full to avoid the embarrassment. They must be mightily peeved at Penn National for raising this issue just days before the special session instead of afterwards. But Penn National are pretty savvy folks. They know exactly when to do it.
Two Mikes and a MOM should be embarrassed but are not. The people who vote these idiots into office time after time should really be embarrassed but are not. As a citizen of Maryland and a taxpayer I should be embarrassed and am.
Our wonderful (tongue in cheek) leaders in Annapolis royally screwed up the first iteration of casinos and now they are getting ready to “fix” everything with the upcoming special session. With delicious timing, the Perryville casino now goes on record that it’s not getting enough gamblers just as we’re hoping to add another location to the five we already have….. two of which haven’t even been built! This is better than anything a Hollywood (not the casino) script writer could come up with. Ironically funny as this is and as sad as it is to say, it’s all our fault for sending the same sorry bunch to Annapolis year after year just because they have a “D” after their names. Shame on us!
Lets see… they put a casino at the end of a 40+ minute drive on the OTHER side of a $6 toll from the major population centers of the state – basically in the middle of nowhere with no other attractions – and now they’re shocked at the decline in attendance there when they open a casino in the heart of said same population center… apparently our elected officials have the collective IQ of a duck. The day Perryville opened up I predicted it’d dry up as soon as the Baltimore location opened… Hey Marty, my expertise is always available for a fee. Idiot.
Amazed,
I agree with everything you say except your insult of ducks!
Mike,
He meant to say the IQ of a dead duck. Even then you may be right. IS that why they are called lame ducks? Or is it just because they are lame?
Good job Omalley. Now you are bankrupting the Casinos. And you want to add more of them. What a tool.
They can put the slots they’re getting rid of in Perryville on Davey Boy Craig’s riverboat casino in HdG which would make casino #6? 7?
…but the “expected” revenue has already been spent. The tax man will be knocking at your door real soon.
I’m not a big gambler, but have traveled a bit to experience various casino’s in some towns when the opportunity exist. One thing I don’t understand about Perryville is its Mortuary like atmosphere. the lighting is pretty bad and all the machines make the place seemed cramped. Maybe its just me, but after a NASCAR Race at Dover I went in their Casino and it was a totally different feel. Not an expert, but feel Perryville is dark and depressing. With no movement on the abandoned shopping plaza up there (a joke), did you really expect that place to compete with Dover. Come on!
Haven’t had the pleasure, but maybe with the movie theme they were going for low-light movie theater lobby type of experience?
And I think when the economy picks back up (if), the shopping center will pick up with it. But it was never going to happen on its own just because a casino opened nearby.
Part of the bill of goods. The panacea of gambling.
The demise of the Outlet Center at Perryville long predated the economic downturn. Quite frankly, it is has always been too small and filled with highly repetitive stores to warrant me traveling across the toll bridge to get there. For a while I went once a year to the Van Heusen outlet to get a few new dress shirts for the school year. I haven’t done so in probably ten years. The shopping experience there is just woefully inadequate. It is nothing like going to Lancaster or across the Bay Bridge to the outlets on Rt 50.
After 5 press releases to the contrary, Delegate Glenn Glass has showed up in Annapolis for special session. This guy has trouble deciding which side of the street to walk on.
At least I can trust Glen Glass not to screw me over when he gets to Annapolis. More than I can say about the dude Del. Norman who thinks he can fool me because he has that R after his name.
Wait till they give perryville a bailout
Went to the casino in Ocean City last week. how long has it been there? I noticed several of the machines were already malfunctioning. The machine next to me froze up and continually kept spinning. After the guy called over the tech, he slapped the machine really hard and it started working again. The tech laughed and walked away. The guy playing got up and walked out. I have noticed at the cecil and OC locations several machines left open unattended. Its my understanding that the in house Maryland Lottery agent (one must be on duty at all times) is supposed to be in front of the machine ANY time it is opened or serviced. That rule is in place to prevent tampering of the machine by an employee or customer. I noticed that this rule is broken regularly. I wonder how many other rules/laws get overlooked each day. Once again Omalley good job.
State spent god knows how much on training the original batch of “lottery agents” Training lasted months. Of the five hired for Perryville, all five quit within the first 6 months. More waste. I wonder if the unions got a hold of the Arundle Casino as fast as they did in Perryville. Promised the employees pay raises and more paid vacations. All they get is money taken out of the check each week so that the union can blow it on politicians.
DUH, they are getting rid of the Machines to make way for table games.
Question for our Delegates: Why doesn’t Maryland mandate that all lottery games proceeds and a large portion of gambling revenues, go to benefit higher education? These funds could go to pay for specific educational programs including college scholarships for students with excellent academic credentials who might otherwise not qualify for scholarships.
Oh, I understand, you elected officials can’t agree on anything that might benefit the average voter unless there is something in it for you and your friends.
The number of casinos within driving distance is creating an oversupply.
Chuckle, chuckle, chuckle – O’Malley’s trough is shrinking!! Unfortunately the joke is on all of us – his funds are drying up so he’ll need to find a new source so he can keep giving it away. Let me just once hear the Annapolis crew use the only word necessary for this State’s budget “CUT”. You are not respected because you don’t know how to do this while the rest of the world is well used to being able to cut/reduce their spending but not Busch, Miller and O’Malley. 🙁