Thoroughbred Racetrack Casino Slot Revenues for the Nine Southeastern States January 2010 – October 2014

Year-to-date revenue at the Southeastern Racetrack Casino slots has been healthy, particularly in Florida with the addition of Hialeah Park Racetrack and Casino. Three states in the Southeastern region have thoroughbred racetrack casino slots - Florida, Louisiana, and Arkansas. 

Thoroughbred Racetrack Casino Slot Revenues in Florida (in $ million) 

Florida	2010	2011	2012	2013	2014 1
Pompano Park	102.9	115.7	121.7	130.0	112.3
Calder	60.8	76.2	72.4	74.0	614.2
Gulfstream Park	51.2	55.0	50.9	49.8	39.4
Hialeah Park 2	0.0	0.0	0.0	0.0	50.3
FL Totals	214.8	246.9	245.0	253.8	816.2

Source – Florida Racinos: Monthly Slot Revenues. Las Vegas: Center for Gaming Research, University of Nevada Las Vegas.  Revenues are reported as Net Revenues in US Dollars.

Thoroughbred Racetrack Casino Slot Revenues in Louisiana (in $ million) 

Louisiana	2010	2011	2012	2013	2014 1
Delta Downs	170.7	177.6	187.8	189.1	148.6
Evangeline Downs	94.3	95.5	95.5	92.4	71.5
Louisiana Downs	78.5	72.2	73.4	66.3	47.0
Fairgrounds N.O.	45.3	51.2	47.3	51.8	35.5
LA Totals	388.7	396.5	404.0	399.7	302.7

Source – Slots at the track - Monthly Revenue Reports, Louisiana Gaming Control Board. Revenues are reported as Adjusted Gross Revenues in US Dollars.

Thoroughbred Racetrack Casino Slot Revenues in Arkansas (in $ million) 

Arkansas	2010	2011	2012	2013	2014 1
Oaklawn Park	25.8	43.6	64.1	74.3	69.3

Source – Electronic Games, State of Arkansas, Department of Administration and Finance – Revenue Division.  Arkansas categorizes slots as electronic games of skill. Revenues are reported as Net Revenues in US Dollars.

¹ 2014 figures are from January 1 through October 31

² Hialeah Park Racetrack and Casino opened for business in September 2013. Our source recorded casino net revenues beginning January 1, 2014. 

Casino Slot Revenues Boosted at Racinos Other than Thoroughbred Racetrack Casinos in the Southeast

Three of the nine Southeastern states have racinos: 

• Florida currently has seven racinos, four thoroughbred racetrack casino facilities and three others – two greyhound racetrack casino facilities and one Jai Alai casino facility. A second Jai Alai casino facility is currently closed. 
• Arkansas has one thoroughbred racetrack facility and one other racino – a greyhound racetrack facility. 
• Louisiana has four thoroughbred racetrack casino facilities and no other, so are not included in this post. 

The table below details the casino slots net revenues for those racino facilities that do not have thoroughbred racetracks. Our next post will detail those facilities with thoroughbred tracks. We can see that net revenues are taking an upward trajectory over the five year period. It also does not appear that the introduction of the casino slot facilities at Miami and Dania Jai Alai have cannibalized any revenue from the pre-existing Mardi Gras and Flagler locations. 

Annual Casino Slot Revenues for Racinos Other than Thoroughbred Racetrack Casinos in Florida from January 2010 through October 2014 

	2010	2011	2012	2013	2014 1
Mardi Gras	49,739,421	54,922,180	53,144,985	51,592,491	40,573,074
Flagler	64,580,248	79,275,013	76,820,883	76,941,463	65,858,937
Miami Jai Alai 2	0	0	52,963,182	63,863,382	45,723,420
Dania Jai Alai 3	0	0	0	0	7,562,678
Florida Totals	114,319,669	134,197,193	182,929,050	192,397,336	159,718,109

Source - Florida Racinos: Monthly Slot Revenues. Las Vegas: Center for Gaming Research, University libraries, University of Nevada Las Vegas, 2014.

Annual Casino Slot Revenues for Racinos Other than Thoroughbred Racetrack Casinos in Arkansas from January 2010 through October 2014 

	2010	2011	2012	2013	2014 1
Southland Park	35,011,450	78,485,617	116,911,339	140,143,644	123,751,572

Source – Electronic Games, State of Arkansas, Department of Administration and Finance – Revenue Division. Arkansas categorizes slots as electronic games of skill.  Revenues are Net Revenues.

¹ 2014 numbers are from January 1 through October 31.

² Miami Jai Alai began casino operations January 2012.

³ Dania Jai Alai began casino operations in January 2014 and closed October 12, 2014.

Florida Casinos and Racinos – What to Expect in 2015

I attended the Florida Gaming Congress held November 10^th and 11^th at the Hyatt Regency, Miami.  The conference was organized and produced by Spectrum Gaming.

Spectrum presented an outstanding slate of speakers and panelists which included Florida State Senators, past and present members of the Florida House of Representatives, senior leaders of owners and operators in the Florida Casino and Racino industries and significant members of the legal and finance industries involved in Florida gaming.

The primary focus was the future of the Casino and Racino Industry in Florida in light of the pending negotiation of the Seminole Compact renewal in 2015, and the development of the industry beyond.

Specific topics included:  

• Casino and racino development in South Florida vs North Florida
• Potential participation of Indian Casino development and racino facilities in North Florida
• Expansion of the existing racinos in South Florida, entry of large destination resorts into Florida, and
• Development of a Florida Gaming Commission.

The consensus was that whatever determinations and changes are made in 2015, they will be incremental rather than major. In upcoming posts, I’ll be writing on these discussions and further news and providing my ideas for 2015 and beyond. 

New Orleans Investment Conference – Will stagflation kill the local casino?

I recently attended the New Orleans Investment Conference. While this annual conference is targeted toward the individual investor, some of the take-aways can be applied to the casino and racino world.

The focus of the conference was on gold as an investment and even the potential return to the gold standard – neither of which really matters for our purposes. However, many of the panels delved further into some troubling markers and underlying problems in the US economy.

Former Fed Chairman and feature guest speaker Alan Greenspan  participated in  panel discussions  and a question and answer session. Unfortunately, much of his time was spent responding to questions about decisions he made during his tenure at the Fed. However, Greenspan did question the power of the Fed, said he “never said that the Central Bank was independent,” referred to their balance sheet as a “pile of tinder.” With the current US inflation rate lagging below the 2% target, Greenspan anticipates that the Fed will continue to take steps toward raising the inflation rate.

For me, the real message from the conference is in the declining value of the dollar, which leaves casino patrons with less discretionary income. Dr. Marc Faber drove this message home with his excellent 60 slides in 60 minutes presentation, painting a troubling picture of the current state of the economy. While the Fed is trying to reach the inflation target, growth is slowing, wages are steady or declining, and commodity prices are falling. He pointed out that millennials are earning less than their parents did, and baby boomers are poorer than their parents were in retirement. According to Dr. Faber, the median income has declined since the 1980s by around 36%.

He also pointed to a troubling statistic -- 31% of car loans are now subprime. While the risk to financial institutions is likely low, the risk to the individual is high. What does this mean for casinos? The average Joe no longer has discretionary income. Not only can he not afford to gamble, he can’t even afford the car that would take him to work.

In our regular travel to casinos across the southeast, we’ve seen cutbacks or even closure of many of the casinos targeting locals, while deluxe destination casinos are growing and expanding. With wage stagnation becoming a key concern, a strategy targeting the wealthy and ultra-wealthy may be the key to growth.

Louisiana Commercial Gaming Revenues: Destination Casinos Lead the Pack

We break the 19 commercial Louisiana casinos and racinos into four regions: Shreveport/Bossier City, Lake Charles, New Orleans and Baton Rouge.  Overall, Louisiana commercial gaming revenues have declined slightly since 2013.

Louisiana Commercial Casino/Racino Revenues*
	May-Sep 2014	May-Sep 2013	% Change
Shreveport/ Bossier City	$313,484,299	$311,683,341	0.58%
Lake Charles	$316,045,688	$321,531,644	-1.71%
New Orleans	$262,600,976	$266,726,610	-1.55%
Baton Rouge	$117,269,307	$119,892,991	-2.19%
Total	$1,009,400,270	$1,019,834,586	-1.02%

*Source: Louisiana Gaming Control Board Revenue Reports

We don’t feel that this small drop is cause for concern, though. When we look at revenue for the top casinos in the state, revenues have actually risen in the top three. Because racetrack seasons can vary wildly each year, the decline at Delta Downs in the Lake Charles region is not alarming.

Revenues at Louisiana's Top 5 Commercial Casinos/Racinos*
		May-Sep 2014	May-Sep 2013	% Change
1	L’Auberge/ Lake Charles	$154,842,866	$148,547,589	4.24%
2	Harrah’s/ New Orleans	$139,076,767	$134,017,029	3.78%
3	Horseshoe/ Bossier City	$89,983,319	$85,197,064	5.62%
4	Delta Downs/ Lake Charles	$69,718,689	$77,301,439	-9.81%
5	L’Auberge/ Baton Rouge	$61,854,926	$63,637,087	-2.80%
Top Five LA Casino Totals		$515,476,567	$508,700,208	1.33%

*Source: Louisiana Gaming Control Board Revenue Reports

We see an upward trend in Louisiana destination casinos like L’Auberge. These luxury destinations attract the young, the wealthy, and the tourists. When casino revenues across the country are sluggish, this rise in luxury destination casinos is worth following.

Please note: Revenues for the four Native American Casinos in Louisiana are not included in this writing. Stay tuned for more information on this topic!