Bussing Chinatown to PA Casinos driving Table Games Revenue
2004 was a major turning point for Pennsylvania. That was the year the state legalized slots parlors at racetracks, resulting in the first casino grand opening, Mohegan Sun at Pocono Downs, in 2006. The market grew so abundantly that lawmakers chose to expand into table games in 2010, and their profitability has increased with each passing year.
Table games like baccarat, blackjack and roulette have helped attract more and more customers to the gaming floors of PA casinos. And while slot machines remain the number one source of income for the states gambling destinations, which have grown to 12 in the last decade, revenue reports show that table games are starting to make up a rather significant portion of the Keystone State’s gambling market.
When table games were first introduced, FY2010/11 records from the Pennsylvania Gaming Control Board (PGCB) showed that they grossed $507.7 million in their first year. That figure represented 17.8% of the overall gaming market. The remaining 82.2% was driven by play at slot machines.
Year after year, revenue generated by table games grew, partly due to the fact that more and more casinos were expanding their gaming floors to install them, and partly because more players were flocking to the casinos to play them.
The most recent data from the PGCB revealed that in FY2015/16, tables games gross has increased to $839.2 million, representing 26% of the total market. Thus slot machines now account for just 74% of all casino revenue at PA casinos.
Asian Gamblers, Not Millennials, Driving Table Games Growth at PA Casinos?
It’s been said time and again that millennials simply aren’t interested in slot machines, preferring to play more thought-provoking, skill-based games like blackjack. But some analysts believe it’s not a millennial customer base that shifting the tides, but rather a new breed of Asian gamblers who very rarely play the slots.
According to Steven Norton, Chairman and CEO of Norton Management Services and a founding director of the American Gaming Association with decades of experience in the gambling industry, 26% is very impressive number.
“In most jurisdictions, slots are 80 to 85 percent of the win,” said Norton. “With casinos that rely more on local business, people that are close by, generally the slots are going to way outperform the table games.”
In Macau, China – the world’s largest gambling market – Norton said the majority of customers are Asian, and only about 10% of the gross gaming revenue comes from play on slots machines. The rest comes from tables games, especially the Asian favorite, baccarat.
Norton believes PA casinos like the Sands Bethlehem are harnessing the table games market by running regular bus tours from Asian communities as far away as New York and New Jersey.
“They run a lot of buses like we used to do out of Atlantic City,” said Norton. “They’re running them out of Chinatown, people playing baccarat I would think.”
He countered the idea that PA casinos are targeting millennials, saying, “So far, they don’t seem to be that interested in a lot of things (casinos) do. The smart casinos are really looking to them to come and enjoy the entertainment, the dining and other interests,” Norton said.
PGCB Executive Director Kevin O’Toole said their level of table games popularity can also be attributed to generous regulatory guidelines for games like blackjack. “Pennsylvania casinos are offering a good gambling product on both table games and slots,” he said.
O’Toole explained that, in many gambling jurisdictions, like as Vegas, the house edge at blackjack is increased by paying only 6-to-5 for a player’s natural blackjack. At PA casinos, all blackjack tables are required to play the more generous 3-to-2 on natural blackjack. As such, in Vegas a $10 bet could only award $12 for a natural blackjack, where in Pennsylvania, a $10 bet would pay $15.
Despite numerous legislative moves towards gambling reform in the state – including legalized online gambling and the installation of slot machines at airports and off-track betting sites – O’Toole said he doesn’t foresee invocation of a 6-to-5 blackjack rule on the horizon.