Sunday, November 29, 2009

Aloysius Lilius saves gambling in Pittsburgh

The PG pokes at the state of casino competition in town here. One theme seems to be that things might be slowly getting better.. or at least things are not as dire as they seem to some of us.  I can’t pass on commenting on a paragraph, the point of which seems to say that things might be getting better. Here is the verbatim quote:

(at the Meadows) gross terminal revenue fell from $29.9 million in July to $22.4 million in Sepetember before rebounding slightly to $22.6 million in October.
a bit later it has: 
… Rivers revenues, while well below projections, have seesawed, going from $16.2 million in August to $15.6 million before jumping back to $16 million in October. (emphasis added in both)
So let's deconstruct the verbiage:  “rebounding slightly” and “jumping”. For the meadows case the slight rebound was a jump from $22.4 to $22.6 million. It works out to +0.85% if you look up the full number. In the Rivers casino case the ‘jump’ came from an increase from $15.6 to $16.0 million… if you look it up it was +2.63%. In both cases the comparision was October vs. September.

So maybe the words are a bit exaggerated?   But no, there is this other little point that may make a difference.  Probably worth mentioning in there somewhere is that October has 31 days while September has 30!  So even if revenue flows stayed exactly the same you would expect October revenues to come in over 3.3% higher compared to September. And in the case for Rivers you would think that the abnormal week of G20 in September might be noted as a big factor causing that delta. 

If you look at their actual revenue flows the "slight rebound" at the meadows was actually a decline nearly 3 times larger or minus 2.4%.  The 'jump' at Rivers was actually a decline of 0.67%.  Which may seem small numbers, but for a monthly change are pretty rapid declines by most standards.  So the qualitative description of the trend is essentially opposite what I think readers took away from the story in itself.

So the best explanation for the jump has nothing to do with the state of the market, marketing, the weather, rivers, advertising or competition of any kind... it's all because the orbital period of the moon divided by the time the earth takes to rotate on its axis is not a whole number. That and a little help from a polymath Renaissance doctor.

Probably worth mentioning, but most of November is done at this point as well and those numbers are not great shakes.  Month to date revenues at the Meadows are at a rate which would be down over 9%. Rivers is showing some recovery from the artificially depressed September.  They would be up 2.5% if they end out November on pace which I suspect they won't... This little event called Thanksgiving coming in the way.  Together though the cumulative revenue between the two casinos is down solidly again.  That is the huge story just being missed completely.

Great photo with the PG story though.

Yeah, yeah... I know... who cares?   Dennis who?!


Blogger fester said...

I care --- I really do ---

I love the line in the PG article where the obvious is stated from the Wheeling GM :

"We're in a competetive market" which implies a squeeze on profit margins, and higher pay-out rates in the future which means even less state tax money in the future (and guess what, it gets worse when Ohio opens up)

Sunday, November 29, 2009 8:36:00 PM  
Blogger Vannevar said...

Nice reference to Aloysius.

Sunday, November 29, 2009 9:30:00 PM  

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