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Maryland Casino Shows Potential

Posted on May 12th, 2011

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In spite of revenues falling short of original projections, gambling analysts are saying that Maryland’s casinos manage to maintain a satisfactory performance. The two casinos, Hollywood Casino in Perryville and Casino at Ocean Downs in Berlin, were able to collect combined revenues amounting to $77 million, which includes earnings since the start of their respective operations until April of this year. Hollywood Casino opened in September 2010 while Casino at Ocean Downs started operations in January.

However, officials admit the above figures are nowhere near the estimates made in 2007. Still, they were quick to justify the casinos’ slow start by saying that calculations were made before the economic recession gripped the US. Furthermore, competitors in West Virginia, Pennsylvania and Delaware have not yet added table games around that time. Perryville suffered from a continuous downtrend in November of last year until January 2011. Things started to turn around in February. Then in April, it was able to take in $100 million. For the first quarter of this year, Perryville made $3 million in profits from the $27.8 million average revenue. The casino earns roughly $198 for each of its 1,500 machines. Steven M. Wieczynski, an analyst at Stifel Nicolaus in Baltimore, said Perryville’s figures are along Wall Street projections.

On the other hand, Ocean Downs has reflected an average earning per machine of $147. With 750 slots, the casino was able to rake in $3.5 million in April. Like Perryville executives, government officials are optimistic that Ocean Downs will have better revenues this summer. According to Maryland Lottery director Stephen Martino, although casino proceeds are not as impressive as expected, the slots were at least able to create more than 500 employment opportunities. Apart from that, casino money was also able to provide $37 million as funding for education. Martino said that the state is currently thinking about adjusting the revenue projections by considering the current economic situation. He also expressed satisfaction that both Perryville and Casino at Ocean Downs have no reported violation of gambling regulation.

Although gaming establishments outside Maryland offer more options such as roulette, poker and blackjack, residents who used to drive to nearby states for some casino action are now hitting Hollywood Casino and Casino at Ocean Downs. Such is good news indeed for government as other states will have less chances of benefitting from Maryland residents’ money. Also, out of the $77 million reported casino income, $52 million goes to the state. This amount is based on a 67 percent tax rate, the highest in the country. Government expects more revenue once the other three similar facilities begin business. In 2008, government approximated that once all five are in full operation, about $157 million will have been earned by 30 June 2011, the date which marks the end of the fiscal year. Also, it was projected that the casino slots will add $600 million to the state’s funds. These figures convinced voters to approve the establishment’s construction and operations.

However, some people continue to question the casino’s ability to contribute to the state. Similarly, those who oppose the casino projects have also thrown criticism in the state’s $200 million purchase of additional slots for the two casinos. Once the other three casinos open, it is possible that the state will also buy more slots for each. On the matter of adding more table games to increase revenue, Wieczynski remarked that the state will need to reduce its tax rate for the benefit of both the state and the casinos.

On their end, the casinos continue to devise ways in order to attract more gamblers, as well as ensure the loyalty of current customers. For instance, Marc DeLeo, Perryville’s director of marketing, explained how the casino has intensified its marketing strategies through give-aways, gas cards and lottery tickets. This month, Perryville shall give away a Ford Mustang. All these fanfare and schemes aim to create excitement and interest in the casino’s services. The casino’s general manager, Himbert Sinopoli, expressed high hopes that things will get even better. Meanwhile, Ocean Downs also has their own brand of marketing. Since the casino opened in January, over 27,000 visitors have availed themselves of the Player’s Rewards Club.