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June 2012
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Report: Gaming market unstable

BY WILL PINKSTON wpinkston@paducahsun.com

State gaming numbers reflect a recent downward trend for regional riverboat casino operations but a noticeable up-tick in video lottery terminals' quantity and income for the year's end.

More than a year after the delayed Illinois Video Gaming act allowed lottery terminals to spring up in businesses statewide, the devices appear to be gaining popularity and making a profit - albeit relatively small - when compared with regional riverboat locations that are coming off declines in both revenue and admissions.

The downhill slope has Harrah's Metropolis Casino and Hotel not only measuring an overall 25-percent decline in revenue since 2010, but recently an off December for the riverboat with a 20 percent decline in admissions and 16 percent decline in revenue compared to the previous December, according to the Illinois Gaming Board.

The gaming board's monthly review reported Harrah's 2013 calendar-year revenue at about $85.5 million and 672,000 annual admissions, both representing about 12 percent drops from the previous year.

While the Cape Girardeau, Mo.-based Isle of Capri casino opened its doors in October 2012 as one of Harrah's closest rivals, aside from the initial spike in admissions and revenue surrounding its opening, Isle of Capri also has registered a comparative financial slump at the year's end.

According to the December monthly review from the Missouri Gaming Commission, the Isle of Capri riverboat is down 27 percent in admissions and 9 percent in adjusted gross revenue from the previous December. The gaming commission reported Isle of Capri's 2013 calendar year revenue at about $62.3 million but about 2.1 million annual admissions.

Ryan Bierbaum, marketing director at Harrah's, said several factors have played into the Metropolis location's recent dip.

"We saw general market declines and softness due to calendar layout and weather," Bierbaum stated via email. "Thanksgiving came later than normal this year, which shortened the number of shopping days. We were also impacted by weather this year, which was not the case in 2012. To a lesser degree, revenues continue to be impacted by the growing number of VLTs in the state."

The rise of video lottery terminals grew considerably across the southern Illinois region within the past year. Altogether, nearly 100 video lottery terminals dotted the southernmost seven Illinois counties and Williamson County as of November. About $3.5 million was wagered across those locations in November, generating about $281,600 in revenue for local owners.

While the number of terminals in Metropolis actually dropped over the summer with the closure of five terminals at Bob's Bowling Center, the five terminals at Cheers Food and Fuel convenience store immediately adjacent to Interstate 24 have experienced an increase in wagering through the year.

According to the most recent gaming board figures, the five terminals at Cheers saw about $464,000 wagered in November alone, compared with the $52,500 played in December of 2012.

"We feel like it's been worth what we had to spend in preparation for it," said Nathan Long, CEO of Cheers Food and Fuel. "The volume has been up and down, and we've had months significantly different than others, but it does seem to increase with holiday traffic through there."

While the terminals have shown a positive trend within the past year, likely in part due to their relative newness, officials don't anticipate the gaming devices overshadowing casinos altogether. As many of the terminals are located within convenience stores, bars or lodges, many of the transactions at the machines could represent spur-of-the-moment wagering as opposed to the customers that turn out for the full casino atmosphere.

"We are able to provide a larger variety of gaming having recently installed over 300 new video poker and slot machines," Bierbaum stated via email. "We have the best hotel offering in the area. We provide wonderful dining and live entertainment.

"Definitely more fun than a VLT."

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