Slowing Revenue Growth in Florida Racino Slots

2016 Florida Revenues from Slots at Racino: Net Revenues Increase while Growth Slows

The charts and listings below tell the story of slowing growth and more expensive revenues in calendar year 2016 for the 8 Florida Racinos.

2017 proposed legislation for the Florida Racino Industry should require a significant review of what is happening with the eight existing Florida Racinos. The statistics are not indicative of a growth industry. 

Chart 1: Calendar Year Numbers for the 8 Florida Racinos

Chart 1 shows five of the eight Racinos with a decrease in Net Revenues, two with increases and one re-opening with new revenues in 2016.

Casino	Net Revenues	Y/Y % change	Hold %	Promo %	Market Share %
Gulfstream	$47,241,009	-3.49%	6.01%	24.52%	8.65%
Mardi Gras	45,767,506	-5.51%	6.75%	23.12%	8.38%
Pompano	142,287,479	-3.41%	8.17%	17.68%	26.06%
Flagler	81,069,957	-2.92%	6.11%	3.57%	14.85%
Calder	74,370,902	-0.15%	7.18%	25.69%	13.62%
Miami Jai Alai	61,782,543	0.80%	5.40%	16.70%	11.32%
Hialeah Park	70,813,899	6.18%	5.81%	11.80%	12.97%
Dania Jai Alai *	20,046,515	*	6.57%	17.12%	3.67%
Statewide	$543,379,810	2.88%	6.53%	16.75%

*Note – Dania Jai Alai re-opened in January 2016.  It was closed for remodeling during calendar year 2015.

 

Chart 2: Rate of Growth in Net Revenues

Statewide Net Revenues increased 2.88%, a dramatic slowdown from the previous two years. Further, this increase included the re-opening of Dania Jai Alai which added over $20 million to the statewide total in 2016 with zero in 2015. Statewide Net Revenues for 2015 were $530,661,905, an increase of $15,292,861 over 2014. Absent the Dania Net Revenues, statewide Net Revenues would have decreased $4,753,654 or 0.89%.

• Years 2015 to 2016  =  2.88% (with the addition of Dania Jai Alai)
• Years 2014 to 2015  =  4.97%
• Years 2013 to 2014  =  8.11%

Chart 3: Net Revenue Growth per Additional Promotion Credit Invested for the 8 Florida Racinos combined

(ie,how much new net revenue was produced by each additional Promotional Credit?)

Charts 3 and 4 show that the effect of Net Revenue growth per additional promotional credits decreased significantly from 2014 and 2015.

	Additional Promo	New $ Net Rev	New Net/Promo
2015 – 2016	$         10,341,990	$     15,292,861	$                1.47
2014 – 2015	$           4,841,127	$     25,133,659	$                5.19
2013 – 2014	$             -849,240	$     37,941,445	***

***In 2014 Florida Racinos provided $849,240 fewer Promotional Credits than they did in 2013, yet they produced an additional $37,941,445 in additional Net Revenues.

In 2015 Florida Racinos provided $4,841,127 more Promotional Credits than they provided in 2014, and they produced an additional $25,133,659 additional Net Revenues, or + $5.19 per Promotional Credit provided.

In 2016 Florida Racinos provided $10,341,990 more Promotional Credits than they provided in 2015, and they produced an additional $15,292,861 additional Net Revenues, or $1.47 per promotional Credit provided. Promotional Credits in 2016 were only 28.3 % as effective in producing Net Revenues as they were in 2015 and significantly less than in 2014.

Chart 4: Promotional Credits as a Percent of Net Revenue

• 2016 = 16.75%  y/y + 9.55%
• 2015 = 15.29%  y/y + 1.32%
• 2014 = 15.09%

Chart 5: Hold % = Net Revenues as a percent of total Credits In

Chart 5 shows a slight decrease in the Hold % for the overall Florida Racino facilities.

• 2016 = 6.53% (-)
• 2015 = 6.60%  +
• 2014 = 6.35%

Source:  University Libraries, University of Nevada Las Vegas