PA Casinos Invest $250 Million In Renovations Since Pandemic - Play Pennsylvania
At least $250 million in renovations, including new hotels, retail sportsbooks and upscale restaurants, have changed the landscape for Pennsylvania casinos since COVID-19 closures in March 2020. The added layers of entertainment were needed to attract and keep customers and gain or keep a competitive advantage.
As always, any industry must adapt and change over time. That has been especially true for land-based casinos in Pennsylvania and beyond over the past few years. Pandemic closures and subsequent impact, in addition to increased competition and high inflation, have pushed PA casinos to reinvent themselves in an attempt to return revenue to pre-pandemic levels.
Pennsylvania casinos have also had to deal with shifting trends in how visitors of different ages spend their time and money at PA casinos. All these factors have prompted a variety of strategies for increasing revenue. New construction and upgraded offerings continue to be among the most common moves.
PA casinos see different degrees of COVID impact, recovery
Since pandemic closures in 2020, some Pennsylvania casinos have recovered with slots and/or table games revenue numbers equaling or exceeding pre-pandemic levels. Others still lag behind their former benchmarks.
As you can see from the charts below, as with all casinos, Wind Creek suffered a setback in both categories in 2020, but rebounded nicely in 2021. Slots have remained stable, while table games have skyrocketed. In July 2022, Wind Creek broke the state record in table game revenue, recording $23.6 million. It remains a top-three casino in revenue for slots and table games.
Parx Casino, Mohegan Pennsylvania and Valley Forge Casino are among those that have gotten back to pre-pandemic numbers.
Hollywood Casino at Penn National Race Course and Hollywood Casino at The Meadows are two casinos that have not seen revenue numbers reach pre-pandemic totals. Both verticals are down significantly since the beginning of the pandemic. Harrah's Philadelphia and Rivers Philadelphia also have not rebounded to pre-pandemic totals. Before getting into some of the measures casinos have taken to help revenue rebound, let's talk challenges.
Challenges and roadblocks for casinos abound
It's tough to pinpoint reasons why so many PA casinos have failed to get back to 2019 revenue benchmarks. Most likely because it is a combination of factors and different for every casino.
For one, "skill games" or unlicensed gambling machines continued running rampant in 2022, which was cited as a major reason both Hollywood casinos (and others) have removed several slot machines. Penn Entertainment CEO Jay Snowden has made public attempts to ban skill games, claiming, "this is an existential issue for the industry."
Rivers Philadelphia, located in the city of Philadelphia, endured the harshest of COVID-19 restrictions in terms of closures and masking requirements. Harrah's Philadelphia and Parx, located just outside of city limits, were not subject to the same rules.
Inflation could be another reason for the decline as gas and food prices soared in 2022. That leaves many visitors with less discretionary income.
The other reason quite simply could be increased competition. There are now five casinos in the greater Philadelphia area, with Live! Casino Philadelphia opening most recently in February 2021. It's 12.5 miles from Harrah's Philadelphia and 5.6 miles from Rivers Philadelphia. The competition can't help matters when three casinos are within a 20-minute drive of each other.
Newer properties get early visitation boost
Some of the newer casinos, such as Live! Casino Pittsburgh, have seen different trends than mature casinos. Since Live! Casino Pittsburgh opened in November 2020, it has seen changing trends in visitation and spending per customer.
"What happens with these properties as you know when you open, you get people from further out there. We call them 'lookie-loos,'" Live! Casino Pittsburgh General Manager Sean Sullivan said. "They want to come over from the Meadows, they want to come over from the Rivers, they want to see the new property. And with that, you get more volume, but you get less average value per customer. As time wears on after your first year, you'll see a little settling there. So now the total customers that are coming in slightly reduces, but the gambling of each customer slightly increases. And we've seen that, and we attribute that to the lookie-loo factor."
Sullivan said the average stay for a visitor is 111 minutes.
Spending and visitation habits of PA casino customers
Parx Casino is the leader in slot play in terms of revenue in Pennsylvania. In November 2019, Parx recorded $34.7 million in gross revenue, which easily led all casinos in the state.
The pandemic put a dent in revenue over time for Parx and other casinos across Pennsylvania, noticeable in the Nov. 2020 numbers. Parx saw a revenue decline to $27.5 million in November 2020, but it rebounded to $31.6 million by November 2021. Slot play was fairly flat year over year from there, dipping to $30.01 million by November 2022.
Though 2021 and 2022 numbers rebounded modestly, spending habits are noticeably different.
Visitation is not a problem, Parx CMO Marc Oppenheimer said in May, as adults 70 and older were visiting Parx more frequently. However, he noted spend per visit was down 20% due to factors like inflation.
Focus on VIP customers to increase revenue
The cut in spending from visitors means Oppenheimer has to appeal to those who still are showing up.
"We're looking at opportunities to identify decliners and provide customized offers for them," Oppenheimer told Tino Magnatta in October. "We are really doing it for decliners in the segments where the rest of the segment has stayed strong. We're not going after the segments where we're seeing consistent and constant decline, which is mainly the lower levels. The dollars aren't there to get more from them."
Parx brought back a popular promotion in September 2022 focused on frequent and VIP players.
Oppenheimer said that Parx gained shares in slot play because of the promotion, which is a collection of tickets. So, the more visitors stay and play, the more tickets they collect. That's where the focus likely will be in 2023.
"The piece of the business that's holding in there and keeping the industry going right now are the loyal, good players," Oppenheimer told Magnatta. "That's where we've seen our growth and the part of the business that's hanging in there given the economy. We're really trying to focus on those areas [in 2023]."
Some casinos focus on attracting a younger demographic
Casinos in Pennsylvania have had to adapt to become much more than a gambling site. The entertainment, including food and shows, is perhaps just as important as gambling itself for attracting and keeping visitors in today's market.
Casinos across the state have added many new amenities to bring in new customers and retain existing ones. Many additions target all gambling-age demographics, but others clearly cater to a younger, newer audience.
Penn is one PA gambling company that has taken the approach of appealing to a younger demographic. A major way they've done this is through their partnership with Barstool Sports. In Penn's Q3 earnings call, Snowden mentioned an uptick in online and retail play from the 21-to-44-year-old segment.
"In just a few years, we've seen this group grow from just a bit over 10% of our total theoretical revenue to nearly 20%," said Snowden. "We are continuing to re-imagine our properties to appeal to this demographic with dynamic retail sports books and sports bars, third-party F&B concepts, refreshed hotel products, new entertainment and best-in-class technology, which we believe will pay meaningful dividends in the quarters and years ahead."
Retail sportsbooks are another attractor for younger customers
Snowden put those ideas into action before he made those comments by adding new retail Barstool Sportsbooks at Hollywood Casino at Penn National Race Course and Hollywood Casino at The Meadows, both of which cost $7 million in renovations.
Barstool Sportsbook at Hollywood Casino PNRC opened in March 2022 and includes:
- Three blackjack tables
- Ten craps tables
- 10 hybrid table game stations with four display screens
- 28-foot jumbotron
- 300 square-foot TopGolf Swing Suite
Barstool Sportsbook at The Meadows opened in June 2022 and includes:
- Overlook of the racetrack
- A restaurant and multiple bars
- Slot machines and a low-limit table games pit
- 45 large televisions
- A 48-foot-wide video wall
Barstool Sportsbook photos by Katie Kohler.
Rivers Philadelphia catering to VIP and younger segments
Rivers Philadelphia has invested in enhancements to the casino's gaming floor and entertainment segments that appeal to a wide range of customers.
General Manager Justin Moore said Rivers Philadelphia has added new games and completed several upgrades to the gaming floor, including a remodeled High Limit room. Also coming soon to Rivers Philadelphia's casino floor is Interblock Pulse Arena, a dynamic table games arena with stadium seating, dealt using automatic or dealer-assisted generators. This "multi-sensory gaming environment" looks to attract "the next generation of players to the casino floor," according to their website.
Additionally, Rivers Philadelphia is opening three new restaurants in 2023, highlighted by Martorano's Prime, an American-Italian steakhouse by celebrity chef and South Philly native Steve Martorano.
Rivers has also catered to the younger demographic with specific events, like for New Year's Eve 2022.
"We find that all guests are looking for great value and younger guests, in particular, gravitate towards experiential entertainment," Moore told PlayPennsylvania. "That's something we were conscious of when we designed our New Year's Eve weekend, that's an '80s-themed rewind celebration."
Martorano's Prime renderings provided by DMAC Architecture + Interiors/Rivers Philadelphia.
New bars and entertainment options continue popping up at PA casinos
Other casinos continue to make enhancements to their entertainment options, many with a clear younger demographic in mind.
Mohegan Pennsylvania underwent a $10 million renovation project that included multiple new bars and entertainment venues for live music.
That included Hive Taphouse, a bar and live music venue that also has flat screens for NFL and other sports viewing. They also added a Topgolf Swing Suites and over the summer, Embers Terrace which features fire pits and lawn games.
Harrah's Philadelphia added O'Sheas last summer, a new bar with table and pub games. It also has mobile ordering and food delivery for visitors enjoying a game in the sportsbook.
Philadelphia Stadium District also brings younger audience
Live! Casino Philadelphia is one of the newer casinos to open (in February 2021).
The location of South Philadelphia in the Stadium District attracts sports fans by default, many of which fall in the younger demographic range. Live! Casino Philadelphia clearly caters to this group with entertainment and dining options. That includes a FanDuel Sportsbook and Lounge complete with betting kiosks and tellers.
For its efforts, Live! has won awards for best dining and nightlife atmospheres largely from The Prime Rib restaurant and Sports & Social Philadelphia bar (or "after-hours spot").
Hotel and lobby enhancements another focus for PA casino upgrades
Another focus for casino renovations has been on hotel additions and upgrades, making them more appealing for those who may live further away and want to stay and play.
Parx Casino is in the process of opening a new mini-casino in Shippensburg and has aspirations of building a hotel.
Rivers Pittsburgh just added The Landing Hotel, a $60 million project which started taking reservations last fall.
Wind Creek is finishing up a $160 million renovation that includes a 23,000-square-foot ballroom, a second hotel tower and a new lobby. The project was approved in February 2020 and is expected to be completed early in 2023. The casino also recently opened a new poker room after their former room closed for Covid and never reopened.
Valley Forge Casino completed $6 million worth of renovations to the resort's hotel and lobby space in October 2020.
In the current climate of fierce competition for business, PA casinos will likely continue the trend of reinvesting in new construction projects to expand offerings and stay competitive.
Photo by Mohegan PA/PlayPennsylvania
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