Wednesday, January 05, 2011

Mr. Ed makes out

So nobody says I am always negative...   between the normal New Year's celebration, and I suspect the folks in town for the Winter Classic and some not so bad weather, it was a good week down at the casino.  How much better than last year?  For slots alone over the week, $17 million more was put into the machines, most of which was paid out over the week as well.  Then take out all the taxes and the gross revenue still came out almost 34% higher than last year, $2.7 million for the week, vice $2.1 million for the week that included New Years last year.    Then they also made whatever they made on table games on top of that, which has no comparison with last year because there were no table games last year.  So they did well.  If only they could have a Winter Classic every year coinciding with New Years at a stadium a few feet away... and decent weather.  All problems would be solved.

If it was because of all the hockey fans spending time at the casino, maybe the casino should send a check over to the arena?  Oh, wait.  Nevermind.    Anyway, here is the summary:

Last year:
Week of December 28, 2009 - January 3, 2010

Promotional Plays:$536,385.80
State Tax$1,604,857.78
Total taxes:$2,596,093.47

This year:
Week of December 27, 2010 - January 2, 2011

Promotional Plays:$1,128,017.66
State Tax$2,140,502.68
Total taxes:$3,452,670.39

So I feel bad for them a bit...  $17 million more in bets and they come out $700K or so better off... That and I suspect they had a few additional expenses.  Maybe folks ate a lot more as well and they made some extra on that? 

If you are wondering what some of the acronyms are for in where the taxes to:

LSA = Local Share Assessment, which is normally split between county and city for the taxes on slots.
PRHDF = Pennsylvania Race Horse Development Fund, so some happy happy horses. 
EDTF = Pennsylvania Gaming Economic Development and Tourism Fund, which is just a long name to explain away the state's own contribution to a few specific things, namely the Pennsylvania Convention Center in Philadelphia, and out here for  one of the following:

 (4)  for debt service and for development and economic
        development projects for an international airport located in
        a county of the second class
            (5)  for distribution to a community infrastructure
        development fund of a county of the second class to fund
        construction, development, improvement and maintenance of
        infrastructure projects;
            (6)  for the retirement of the indebtedness of an urban
        redevelopment authority created pursuant to the act of May
        24, 1945 (P.L.991, No.385), known as the Urban Redevelopment
        Law, in a city of the second class which is financed in part
        with the utilization of funds transferred to the regional
        asset district
pursuant to Article XXXI-B of the act of July
        28, 1953 (P.L.723, No.230), known as the Second Class County
            (7)  for retirement of indebtedness and for financing of
        a hotel or convention center in a city of the second class        established pursuant to the authority of the act of July 29,
        1953 (P.L.1034, No.270), known as the Public Auditorium
        Authorities Law;
            (8)  for retirement of indebtedness of a county of the
        second class
development fund created pursuant to the
        authority of Article XXXI-B of the Second Class County Code
        and the Urban Redevelopment Law;
            (9)  for retirement of indebtedness of a convention
        center in a city of the second class established pursuant to
        the authority of the Public Auditorium Authorities Law;
            (10)  for payment of the operating deficit for the
        operation of a convention center in a
city of the second
established pursuant to the Public Auditorium
        Authorities Law.
(emphasis added)

Bottom line... in all of this, it is the horses that made out best from the new casinos in the state.  No matter what, the horses are way out in front of the Detroit pension systems.  Better than my property tax bill as well.

Speaking of the casino, or 'sure bets' as it were... I'll have to let the bankruptcy lawywers explain it to me, but there are developments in the Majestic Star bankruptcy via the Gary Post-Tribune, and Bloomberg.  Casinos never go bankrupt do they?  The very end of the article from Gary is of note.


Anonymous BrianTH said...

From what I can tell the casino is making money on an operating basis, even given all the taxes. So in a hypothetical bankruptcy, it really should be all about seniority, no? Meaning if the public entities are senior, the casino's capital investors and junior lenders should be able to absorb all the pain in a reorganization.

Wednesday, January 05, 2011 9:50:00 AM  
Anonymous The Wiz said...

I would love to see the PG or some other paper do an in depth look at state wide casino problems. The Philly license was given to a consortium with three Rendell backers that didn't have financing nor owned land for a location. It was so bad that after five years they were forced to relinquish the license and it is still years away from being built.

But Mr Shick in Lawrence Co was rejected even though they owned the land, had financing of $485 million and asked for no state financing of any type, including tax deals. Why were they rejected? Because of a report that Mr Shick's grandfather may have loaned %20,000 to known mobster Lenny Strollo way back in the 1960s. After a long and convoluted path, that license is now pending court action and is also years away from opening.

And they approved the Pittsburgh license to a group that was so under financed that they couldn't even get the building half completed. It was given to another group under emergency action. And they gave the Pocono license to a guy that was under investigation by the state police for organized crime and that license was forcibly transferred to another owner.

If the Lawrence Co and Philly casinos had opened years ago as they should have, the state would be in better financial shape then they are now and tax relief for all would have been closer to the predictions made by Uncle Ed.

What a mess.

Wednesday, January 05, 2011 3:00:00 PM  
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