Casino revenue results tighten
Ameristar still leads in the KC market, but some of its rivals gain ground in August figures.
By RICK ALM
The Kansas City Star
Rivals are gaining on Ameristar. Kansas City’s casino leader in August posted its weakest revenue and market share performances of the year.
According to the latest financial report from the Missouri Gaming Commission, Ameristar recorded its 18th consecutive month above $20 million in pretax gross revenue — but just barely, at $20.05 million.
Pretax revenue marketwide was $58.1 million, up 4.3 percent over August 2005 but not enough to crack the market’s list of top 10 monthly revenue performances. Statewide, gamblers’ losses were up 5.9 percent, to $130.6 million.
Results elsewhere were similar.
Atlantic City casinos were reported up 4.5 percent, Illinois was up 5.3 percent, Indiana was up 5.6 percent, Delaware was up 8.8 percent and Iowa gambling parlors were up a whopping 14.8 percent largely on the strength of Harrah’s newly remodeled and renamed Horseshoe Casino in Council Bluffs.
While Ameristar’s revenue remained robust, the casino’s August market share fell more than three points from the same month last year, to 34.5 percent, its smallest slice of the local consumer pie since April 2004.
“There’s a lot of money in the market,” said Ameristar General Manager Dave Albrecht of “free coin” vouchers Ameristar’s competitors have sprinkled liberally around the marketplace in recent months to woo players.
The competitors’ giveaway strategy appears to be working. In August Ameristar was the lone Kansas City casino to see its revenues and turnstile admissions decline from a year ago.
In fact, Albrecht said he got $30 worth of free cash at home himself from a competitor even though he hadn’t played at that casino in months. Missouri casino employees are allowed to gamble, but not in casinos where they work.
Giving away money to buy market share is effective but expensive. “There comes a point where there’s no return on it,” Albrecht said.
The Argosy Riverside Casino’s $13.6-million-month was up 17.8 percent for a 23.4 percent share and its best showing in 18 months.
Argosy General Manager Tom Burke credited some of the increase to the property’s new attached parking garage. “Ease of access has always been a driver in the casino industry,” he said.
But he acknowledged that free coin — and keeping up with the competition’s free coin — also played a role. “You’ve got to evaluate your coin programs and remain competitive,” said Burke, who like most casino executives does not disclose property marketing costs.
Harrah’s North Kansas City Casino and Hotel also chalked up its strongest market share of the year, 29.2 percent on $17 million in monthly gross revenue, which was up 5.7 percent. Officials did not respond to a request for comment.
The Isle of Capri limped out of August with $7.4 million in revenue, up 2.8 percent, but only a 12.8 percent market share. Coming on the heels of a 12.6 percent share in July, it was the downtown casino’s second back-to-back sub-13 percent performance in the last 12 months. That’s well off the casino’s historic performance level, which topped off at nearly 17 percent in 2003.
According to the company’s latest quarterly report to the U.S. Securities and Exchange Commission, St. Louis-based Isle attributed declining revenues in Kansas City to “declining patron count attributable to the completion of other expansion projects in the market and increased marketing intensity by competitors.”
Isle earlier this year announced an $85 million Kansas City expansion that would add dining and other nongambling attractions, but the project has yet to break ground. Isle indicated in its SEC filing the project could be under way by spring.
While Isle has converted back rooms to casino floor space and added amenities over the years, it remains Kansas City’s lone casino yet to reinvent itself with a significant brick and mortar expansion.
The Woodlands also had an August to forget.
Monthly turnstile admissions plummeted almost 40 percent to an estimated 15,500 for their lowest mark in six years.
Betting revenues were down 15 percent across the board last month while wagers on the track’s live greyhound races were down 50 percent.
General Manager Jim Gartland attributed the sharp falloff to an August heat wave and one day of canceled races because of rain.
“It was 100 degrees every day … nobody came out,” he said.
The Kansas City, Kan., parimutuel track should see its annual attendance increase starting Sept. 23 when the track’s 17th season of live thoroughbred and quarter horse racing opens. Races are run Saturdays through Wednesdays through Nov. 4.
The track this season will increase broadcasts of its horse racing simulcast signal to 130 revenue-sharing partners, up from 110 last year. |
