COLLEGE PARK – Representatives of the proposed Parx Casino in Prince George’s County say they expect the casino to bring in between $800 million to $1 billion in gaming revenue in its third year full year of operation.
If it hits that target, Parx — a project proposed by Greenwood Racing Inc. — would become one of the largest casinos as measured by gambling revenue in the United States, bringing in more money from gambling than any casino in Atlantic City, N.J., industry analysts said.
“When you’re getting up to the $800 million to $1 billion range, you’re talking about being one of the most lucrative revenue generating casinos in the Western Hemisphere,” said Clyde Barrow, director for the Center of Policy Analysis at the University of Massachusetts, Dartmouth.
Greenwood Racing representatives said they believe the casino will hit those targets because of the demographics of the regional market and the company’s experience with similar gaming operations in Pennsylvania.
“Effectively, the numbers did not look large,” Marc Oppenheimer, chief marketing officer for Greenwood Racing said. “We are pretty confident in our numbers.”
Greenwood Racing is one of three companies competing for the right to build the state’s sixth casino in Prince George’s County.
Representatives for the proposed MGM National Harbor project said they expect their casino to bring in $650 million in its third year of operation. The third bidder, Penn National Gaming, Inc. has not yet released the projected revenue numbers for their proposed casino, Hollywood Casino at Rosecroft Raceway.
Greenwood Racing’s ambitious number gives off the impression that they are trying to “buy” the video lottery operation license, said Andrew Klebanow, a principal with Gaming Market Advisors who worked on economic impact analysis studies for the Baltimore city and Rocky Gap casino projects.
“It’s not politically a bad idea to go with a big projection. Commissions like that,” he said. “They look at that big revenue number and they become enamored by it.”
After site visits last month, the three companies competing to build the new Prince George’s casino presented detailed proposals to the Video Lottery Facility Location Commission at public meetings in Fort Washington.
The commission is now deliberating and expects to make a decision on which company they will award a gaming license to before the end of year.
Two of the largest casinos in the northeast, Foxwoods Resort Casino and Mohegan Sun, brought in about $900 million and $1 billion respectively in gaming revenue in 2011, according to a study done by the
Center for Policy Analysis at the University of Massachusetts, Dartmouth.
The Maryland Lottery and Gaming Commission reported reported earlier this year that Maryland Live Casino, the state’s highest revenue generating casino, brought in a little over $472 million in gaming revenue in fiscal year 2013, which ended in June.
The total collective gaming revenue for the top 23 casinos in Las Vegas, each of which makes more than $72 million annually, was about $5 billion in 2012, according to a report produced by the
Center for Gaming Research at the University of Nevada, Las Vegas that is based on state gaming statistics. The Nevada State Gaming Control Board does not release revenue numbers for individual casinos.
Coleman Bazelon, a principal with The Brattle Group who has done national studies for the American Gaming Association, said gaming revenue for the U.S. was about $35 billion in 2010. Parx’s revenue would essentially make up about 3 percent of that number, he said.
“I know the industry well enough to comfortably say that those numbers would make it one of the largest in the U.S.,” he said of Parx’s revenue projections. “It would be a very significant property.”
Greenwood Racing runs Pennsylvania’s highest revenue-generating casino — Parx Casino and Racing near Philadelphia — according to the project’s website. The casino brought in $487 million in total gaming revenue during fiscal year 2012-2013.
Oppenheimer said that some of their confidence in their projections for the proposed Prince George’s County casino comes from their experience operating the casino in Pennsylvania.
“We know how to work and operate in an environment very similar
to Maryland,” Oppenheimer said of their casino in Pennsylvania.
He said they feel comfortable in projecting higher numbers than Pennsylvania because they expect to draw from a larger local, regional and national market in Maryland.
Parx’s economic analysis report showed that they expect the majority of their visitors will come from Washington and Virginia, areas west of the casino, and as far south as North Carolina, Oppenheimer said.
The vast majority of casinos in the world operate in a local market, with the exception of those in places like Las Vegas, Klebanow said. The Prince George’s location will be no different, with most gamers coming in only on a local day trip visit, he said.
MGM’s president and chief marketing officer Bill Hornbuckle told the commission that they were “conservatively” predicting $650 million in total gaming revenue for the casino’s third year of operation.
Jim Murren, chairman and chief executive officer of MGM, said that they hadn’t seen the proposals for Greenwood Racing or Penn National Gaming, but predicted that MGM would bring in more gaming revenue than the other bidders.
“We haven’t spend too much time thinking about the other guys,” Murren said of Greenwood Racing and Penn National’s proposals. “But just by the public comments that we’ve seen, we are highly confident that our gaming revenue will be materially above either one of the other two applicants, both initially and on a growing basis.”
346 total views, 1 views today