Casino news source: Kansas City Star - http://www.kansascity.com
Winter weather puts a chill on local casino revenue
By RICK ALM
The Kansas City Star
The Missouri Gaming Commission says local casinos’ take dropped 0.5 percent, to $59.6 million, from February 2006.
Frigid February flattened casino revenues in Kansas City and elsewhere around the state and the nation.
The Missouri Gaming Commission reported local casinos’ take from gamblers dropped 0.5 percent, to $59.6 million, from February last year. Statewide, Missouri’s 11 floating gambling parlors’ winnings slipped 1.3 percent, to $132 million.
Casino winnings dropped with February’s temperatures in other states, too, declining 2.5 percent in Illinois, 6.7 percent in Indiana, 4.1 percent in Iowa, 1.7 percent in Delaware, and 4.8 percent in New Jersey’s Atlantic City.
CIBC World Markets analyst David Katz issued an early warning to investors that Missouri casino earnings are already running behind his annual forecast on the heels of a January revenue swoon of 7 percent brought on by mid-month ice storms.
Katz said Missouri casinos were being hammered by “unseasonably cold weather,” not any fundamental weaknesses in the marketplace.
Not so elsewhere. Smedes Rose at Calyon Securities pointed to new slot competition at Philadelphia-area race- tracks for much of Atlantic City’s decline.
At a racetrack casino in Bangor, Maine, where frosty forecasts are more routine, February revenues were reported up a whopping 27.1 percent.
For the month, Kansas City area casinos’ turnstile admissions slipped 11.1 percent, and they were down 12.4 percent statewide. St. Louis area casinos fared even worse, with revenues off 3.5 percent and admissions down 16.4 percent.
Ignoring the nationwide slump, Argosy Riverside Casino and Hotel was the Kansas City market’s lone riverboat to post a monthly gain — a whopping 17.3 percent revenue bump on 8.4 percent admissions growth.
“There’s no magic potion,” said Argosy General Manager Tom Burke of his casino’s steady climb the past year in the battle for market share.
Argosy’s gain has come mostly at the expense of Harrah’s North Kansas City Casino and Hotel, which last month watched its revenues fall 7 percent with admissions down 16.4 percent.
Last month, Argosy’s 24.4 percent market share trailed Harrah’s by 2.7 percent. A year ago, the gap between them was 8.3 percent.
Burke said the company’s credo is to focus on creating positive guest experiences, and he credited the management philosophy of owner Penn National Gaming with placing those little daily decisions in the hands of local operators.
“Can people get in and out of our facility safely?” he said. “Is the place clean? Are we serving good food products? Are our games the games players want?
“What are we doing right? What are we doing wrong?
“All those decisions are made locally,” he said. “By no stretch do we always get it right.”
Market leader Ameristar Kansas City Casino and Hotel held steady at about a 36 percent share while Isle of Capri fell to a 12.4 percent share, down from 13.5 percent a year ago.
Besides Argosy, the only other Missouri casinos to finish the month with a revenue gain over 2006 were Harrah’s in Maryland Heights, the St. Jo Frontier in St. Joseph and rural casinos in Caruthersville and La Grange.
Meanwhile, Missouri gamblers who braved the elements last month lost more money per capita than usual.
The Gaming Commission reported the average gambler in February lost $69.35 per casino visit in the Kansas City market, up from $61.38 a year ago, and $72.49 statewide, up from $64.90.
Much of the increase can be traced to the growing number of penny slots on casino floors, which now make up a record 51.9 percent of all electronic games in the local marketplace.
A year ago, penny games made up 42.3 percent of the average casino’s game mix.
Last month, penny slots in the Kansas City area paid out jackpots at an average rate of 88.74 percent. The payback rate is typically higher for larger denomination games. |
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