2nd-month casino bets fall

COLUMBUS -- Wagering at Ohio's first two casino gambling ventures dropped a collective 8 percent in their second full month of operation, according to numbers released Tuesday by the Ohio Casino Control Commission.

Gamblers wagered a total of $383.8 million at Hollywood Casino Toledo and Horseshoe Casino in downtown Cleveland in July, down from $417.8 million in June, the commission reported. Hollywood Casino on the East Toledo riverfront took in $189.1 million last month, down about 12 percent from $215.2 million in June, particularly because of a drop in slots betting. Its gross revenue after payouts of $19.1 million was down more than 6 percent from the $20.4 million the month before.

The casino opened on May 29, about two weeks after Horseshoe opened its first phase in the former Higbee's department store building.

Horseshoe experienced less of a decline. Total gambling there dropped 8 percent to $194.7 million in July from $202.5 million in June and its after-prize revenue declined to $23.9 million in July from $26.1 million during its inaugural month.

These numbers do not include the casinos' food, alcohol, and other nongambling sales.

The lower revenue numbers mean the 33 percent take by government is also worth a bit less than last month.

The tax on the total of $43 million in after-payouts revenues for the two casinos should be about $14 million to be distributed according to a formula to counties, schools, and other local governments across the state as well as the host cities of Toledo and Cleveland, anti-gambling addiction programs, horse-racing purses, the casino commission, and law enforcement training.

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The Department of Taxation will not release details on how the money would be distributed until it releases its quarterly report in October.

July numbers for Ohio's first racetrack slots parlor, Scioto Downs in Columbus with 2,116 machines, were also not available Tuesday from the Ohio Lottery Commission.

Matt Schuler, the casino commission's executive director, said a second-month drop-off was to be expected and that business at the casinos remains brisk. "There's keen interest when a casino first opens," he said. "After people have had a chance to see it for the first time, then they get down to business.

"We probably won't see until after the first 90 days from opening what the normal trajectory is going to be for attendance and wagering.

"We're only looking at two months here, comparing July to June," Mr. Schuler said. "We need months of data to start making assumptions about the future and where we're going to go."

Bob Tenenbaum, spokesman for Hollywood Casino owner Penn National Gaming Inc., said the company doesn't typically comment on revenue numbers.

"We continue to be very pleased with customer response to the casino," he said. "In fact, we're looking forward to welcoming the 1 millionth visitor in the next week or so."

Bill Thompson, professor emeritus at the University of Nevada, Las Vegas and an expert on casino gambling, said the long Fourth of July weekend may have worked against the casinos.

"Holidays will be lower," he said. "People venture out, unlike a non-holiday weekend when people stay closer to home. Your casinos are serving a 100-mile-circle market where people go back and forth the same day. They vacation in Las Vegas, so July 4th is very big for us. If you have extra days, people get out of Cleveland. They don't stay in Cleveland."

Hollywood Casino paid out nearly 91 percent of what it took in with its 2,023 slot machines, well above the 88 percent paid by Horseshoe Casino in Cleveland, Ohio's mandated 85 percent minimum, and Michigan's 80 percent mandatory minimum for its three Detroit casinos.

Slots at Hollywood Casino accounted for 90 percent of the wagering done there, perhaps because the table games paid out a less generous 81 percent of what was wagered.

But Hollywood's slots revenue accounted for just 81 percent of its total gambling revenue, a reflection of the impact of the higher payouts on its bottom line. Mr. Thompson said Toledo's higher slots jackpots are a result of its close proximity to the three Detroit casinos and the one in Windsor, Ontario.

Cleveland's closest competition is Presque Isle in Erie, Pa. and Mountaineer Park in Chester, W.Va., both about 100 miles away.

"The monopoly casinos offer lower payouts than competitive casinos, at least statewide," he said. "That is a factor. Cleveland doesn't feel the same heat that Toledo does."

Michigan's July numbers for the Detroit casinos are not yet available, but a modest year-to-year decline in June numbers, as well as the number of Michigan license plates in Hollywood Casino's parking lot, suggested at least an initial impact from the new guy in town.

"There's always that honeymoon period," said Rob Walgate, vice president of the Cleveland-based Ohio Roundtable, a staunch gambling opponent.

"There may be high numbers for a year or so, but we're looking at market saturation all around the state," he said. "We knew all along they would not hit the numbers they promised during the campaign. To see a drop in the first month is not surprising, but people who've studied the numbers and who understood the game knew they couldn't deliver what they promised … If it's already dropping, what's going to happen when the racetracks open [their slots parlors]. They'll saturate the market even more."

Penn's Hollywood Casino Columbus is expected to join the club this fall, and Rock Ohio Caesar's Horseshoe Casino Cincinnati will follow next year. In addition to the open Scioto Downs slots parlor, five more racetracks have applied for slots licenses. They include Raceway Park, which Penn National plans to move to Dayton to avoid competition with its Toledo casino.

Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.