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Mt. Airy to drop 150 slots

Posted on January 10th, 2011

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Most casinos ask to increase the number of slots or card tables they have so the return of investment would be faster, but Mt. Airy Casino Resort in Mount Pocono, Pa., asks the opposite. Mt Airy Resort (formerly Mt. Airy Lodge) has applied to remove 300 video lottery terminals from their 2,451 slot facility. “The rationale of this request is economic — Mount Airy simply has an excess supply of slot machines,” Michael Sklar, the casino-resort’s lawyer said. Mt Airy has already submitted a petition to rid of 26 slots due to a conflict in space with their third floor elevator, the second petition is to reduce their machines by 300.

The casino’s petition came after a study on the occupancy, revenue generation and utilization has been made on their machines. An analysis made by a private consultant commissioned by the resort has shown that some of the slots in Mt. Airy are seldom used. The slots generate a 31.1 percent weekday peak, which rises slightly to 53.9 on weekends. Matthew Landry of Innovation Group in Colorado said, for a slot to be a money making machine, it has to be occupied 37 percent of the time. In this casino’s case, this is not the scenario. Landry said that based on his company’s experience with casino operations, Mount Airy’s 69 percent is a dismal failure. “What you’re really looking for is closer to 80 percent.” he said. Mt. Airy slots also does not make the average income of $251 per slot set by the state.

According to Joe Weinart of Spectrum Group, a respected gaming consultancy firm, “Casinos reduce slot machines based on demand, because they do cost money to buy or lease, they do consume electricity, they do occupy surveillance staff, they do require slot attendants.” he said. ” And if demand is lower, removing games does make for wider aisles and a more spacious, comfortable experience for patrons.” The issue of Mt. Airy losing out on revenues was also carefully taken into consideration before the resort filed for the reduction. In fact, Vice President of Casino Operations in Mt. Airy Jim Tuthill believes, that the reduction is good for their casino operations. “A used machine has virtually no value — about $50 on the secondary market. We would be cannibalizing those units and using them in the spare parts inventory.” , he said. In eliminating the proposed 300 machines, the casino could earn $500,00 a year from not replacing the units as they do so every five to seven years. He also assured the employees that the change would not mean any lay offs. Landry also said that the competition has hurt their revenue figures.

Sands Bethlehem in Leigh Valley, draws 50 percent of their revenues from the communities within a 30 mile radius. The overlap of the two casinos has cost Mt. Airy as it is harder for the public to acces than Sands. “The machines don’t translate to revenues if market demand isn’t present,” he said. “It’s really a function of people.” Mt. Airy Casino which is built in Mount Airy Lodge’s former site after it has been demolished, has a 188 room hotel, 25 of which are suites. One of its main attraction is challenging 18 hole Mount Airy Golf Course. It is also equipped with a table games parlor, a spa and a salon. Mt. Airy has also caught the attention of the media and the Gaming Control Board of Pennsylvania when it was slapped with $70,000 fine for underage gambling violation. According to reports, Mount Airy security has reported the first incident themselves but failed to do the same for the second incident. The Board also required the casino-resort to purchase eight ID scanning devices to check patrons’ proof of identification.

The incidents took place last year which involves a 16 year old female, who made her way to the gaming floor and placed bets on the slots for close to an hour before she got caught, the second incident which happened August of 2010, involves a 15 year old girl, who also gained access to the gaming floor and wagered in the slots and on the tables. She got caught three hours later. The Casino insists these are nothing but isolated cases and they do their best to guard the minors from the gaming floors.