The good news for the state treasury and the state’s gaming industry is the dramatic growth in Maryland casino revenue between September 2013 and September 2014, with total revenues up 26.2% in Sept. 2014 over Sept 2013. ($82.4 million vs. $65.3 million a year ago.) Typically, one might expect casino revenue to drop between from August to September with people having significantly less recreational time as vacation season ends. But in Maryland, Sept. 2014 total revenues actually grew by 2.2% from August 2014. In 2013, total revenues declined from August to September by 9.4%. In 2012, total revenues dropped from August to September by 3.8%. The contrast between these two-month spans in 2013 & 2014 is important because it shows that the new casino did grow the total revenues for Maryland casinos and did not just shift money around from one casino to another (although that clearly occurred too). It’s also worth pointing out that Sept. 2014 had one less Sunday (four) than Sept. 2013 (five), yet still: overall revenues for the month were much higher than the previous year. Rocky Gap’s total revenue went up approximately 14% in the one-year time frame, at approximately $3.6 million for the month: an impressive gain for the casino in an area long derided as too remote from the Baltimore-Washington region to be successful.
From Sept. 2013 to Sept. 2014, there were probably a variety of factors in Maryland’s favor steadily driving up revenues and facilitating success, including the contraction of Atlantic City casinos and improving regional economy. Horseshoe Baltimore’s debut in August 2014 likely benefited from both serious players checking out the newest casino (and its opening month promotions) and casual players dropping by after the hype of the grand opening in late August. Some of these casually-interested players were probably not casino patrons before, and may not go back into a casino again, deciding to spend entertainment dollars elsewhere. Caesar’s probably had some success in marketing the Baltimore property to players at Harrah’s Chester or the company’s Atlantic City properties, particularly with all the bad buzz surrounding AC casinos at the moment.
The big question for months for Maryland gaming was: to what extent the opening of the Horseshoe will cut into Maryland Live! revenue? Overall, Maryland Live! earned approximately 9.8% less revenue between the two Septembers, meaning the casino maintained over 90% of its revenue. This should be seen as a qualified “win” of sorts for the folks at Maryland Live! and probably well within the casino’s strategic calculations for the Horseshoe debut. Looking at the VLT data, we do see a drop on the “revenue per unit per day” from $247.13 in Sept. 2013 to $219.41 in Sept. 2014, an 11.4% drop, year to year. Hollywood Casino Perryville- the other most proximate casino to the Horseshoe –dropped similarly on VLT gross revenue per unit per day between the two Septembers: from $162.17 per VLT in 2013 to $144.17 in 2014, an 11% drop. Rocky Gap’s VLT daily VLT win per day was $185.40 in Sept. 2014, a 14.7% increase from Sept. 2013, in contrast to the two central MD casinos impacted by Horseshoe’s grand opening.
In the table games area, Horseshoe’s bite out of Maryland Live! revenue was less dramatic, though still significant. The September to September numbers showed that Maryland Live! declined approximately 8.8% overall, from $18.2 million to $17.8 million, but less than one per cent in the more lucrative “banked games” category (blackjack, baccarat, roulette, etc.). Therefore, most of the decline was in poker: otherwise the casino held on to virtually all of its more significant table games business. Similarly, Hollywood Casino Perryville’s table games drop was also less than the VLT decline, 8% overall. For both Maryland Live! and Hollywood Casino Perryville, slots players were apparently more attracted to the Baltimore casino than tables players.
So now we finally have a few answers, with the significant qualification that we still won’t know the real impact of Horseshoe Baltimore on Maryland gaming for at least two or three months, when the debut effect is clearly past. This is when the real head-to-head stuff will play out, after the debut hoopla is over. Then we should see a more stable revenue picture emerge and more clearly understand how much of the September result sticks. That is: how many of Horseshoe’s Baltimore’s patrons will keep going there or will simply go back to gambling regularly at Maryland Live! or Hollywood Casino Perryville? The Orioles’ playoff run may also be a factor in looking at Horseshoe Baltimore’s October/November revenue: how many of the baseball fans swarming downtown Baltimore are also checking out the new casino or celebrating there after a win?
- Twitter: @jameskarmel