PHILADELPHIA — The way to compete in the casino industry doesn’t have much to do with the games themselves, but instead it’s the other attractions a venue offers.
Whether it’s concerts, shopping, salons or golf, casinos need other amenities in addition to slot machines and table games if Pennsylvania wants to remain the second biggest gaming state in the nation. That was a often-repeated message Tuesday at the eighth annual Pennsylvania Gaming Congress held in Center City Philadelphia.
“I don’t think I can stress enough the importance of a destination resort,” said Steven Geller, a former Florida legislator who works in the gaming law practice group at Greenspoon Marder.
Mohegan Sun at Pocono Downs President and General Manager Mike Bean said the addition of a hotel, salon and conference center later this year at the Plains Township casino always has been in the plans, and he believes it will go a long way toward keeping the venue competitive and attractive to gamblers and non-gamblers.
Not only will it give guests more reason to come to the casino, but it also will give them reason to stay longer and come from greater distances.
“Convenience is the number one factor for people’s decision to game, followed by overall gaming experience,” Bean said.
Added attractions — beer festivals, concerts, horse races or autograph sessions with celebrities —also keep people coming to the casino, he said.
Sean Sullivan, general manager at The Meadows Casino near Pittsburgh, already has a bowling alley and said the casino is constructing a hotel and event center to help draw more guests. The Meadows, he said, wants to keep customers from going to other casinos in western Pennsylvania or crossing over state lines into Ohio, West Virginia or even Maryland.
When Mount Airy Casino Resort opened near Mount Pocono, it had a hotel and golf course in place. Sands Casino Resort in Bethlehem constructed a hotel and convention center. And Valley Forge Casino Resort and the soon-to-open Lady Luck Casino at Nemacolin Woodlands Resort in southwestern Pennsylvania also have hotels.
Geller said though he and his family don’t gamble, they enjoy going to Las Vegas because of the attractions, including restaurants, shows and other amenities.
“You want the convention business, you want the tourism business,” he said.
Matthew B. Levinson, the chairman of the New Jersey Casino Control Commission, said a key to seeing growth in revenues for casinos is on the amenity side. It’s a trend that’s been realized in Nevada and New Jersey, he said, and he expects that Pennsylvania will follow suit.
One problem Geller and Levinson noted that Pennsylvania might have with continued amenity investments is the high slot machine tax rate of 45 percent. Geller said casino operators might put more money into casinos in states with lower tax rates — New Jersey for example has an eight percent tax rate — because the return on investment could be higher.
“Forty-five percent is one of the highest in the nation,” Geller said. “That has to impact the amount people are willing to invest in the state.”
Pennsylvania is the second-highest grossing gaming state in the nation trailing only Nevada. But other states are getting into the casino game and seeing huge revenues, including Maryland, Ohio and New York.
Because of more attractive tax rates in other states, Geller cautioned that “Pennsylvania will have trouble staying number two.”
Mentioning the grandeur of Caesars Palace, Geller said something like that “could not exist with a 45 percent tax rate.”