Nov 1, 2017 5 min read

Pennsylvania may have significantly expanded its gambling options, but for now the operator of The Meadows Casino is standing pat before deciding whether to buy into any of the new opportunities, a spokesman said Tuesday.

Gov. Tom Wolf signed legislation Monday authorizing Pennsylvania’s expansion of gambling online, at airports and truck stops, adding those options to what is already the country’s second-largest commercial casino state.

In addition to putting gaming terminals at airports and truck stops, 10 of the state’s 12 existing casinos will be able to bid on a license for a new, smaller satellite casino with hundreds of slot machines. Bidding would start at $7.5 million, with a table games certificate costing an extra $2.5 million, for a casino limited to 750 slots and 30 table games.

Officials with The Meadows Casino in North Strabane Township said Tuesday it’s too early to tell if it will exercise any of the new options available to casinos.

Troy Stremming, executive vice president for government affairs at Las Vegas-based Pinnacle Entertainment, which operates The Meadows Casino for Wyomissing-based Gaming and Leisure Properties Inc., said the legislation contained 939 pages “in which we’re looking for opportunities” that would make sense for the company to pursue.

But whatever those options may be, Stremming said, they wouldn’t have a negative impact on its operations or its guests at The Meadows.

“We’re going to look at all of the options,” Stremming said, adding that Pinnacle is proud to be the area’s largest tourist attraction. “If we choose any of those options, none will impact” operations at The Meadows, he said.

“What we know how to do best is bricks-and-mortar gaming,” Stremming said, noting that Pinnacle operates 16 other properties in the Midwest and Southeast.

The Meadows Casino currently contributes an average of $10 million each year from its gross terminal revenue from slot machine play to the Local Share Account for Washington County, a commitment that Pinnacle recently reconfirmed to county commissioners. Stremming said Tuesday that the expanded gaming legislation doesn’t add any other LSA contributions from the new options.

Currently, the state’s largest casinos can operate as many as 5,000 slot machines.

Additionally, casinos will be able to offer interactive gambling parlors in eight airports, including Pittsburgh and Philadelphia, while qualifying truck stops can operate as many as five slot machine-style monitors called video gaming terminals.

The Meadows currently pulls 5 million guests per year from the tri-state region.

It appears Pinnacle is sticking to spending on its brick-and-mortar operation locally.

Last month, Allie Evangelista, the new general manager of The Meadows, told Washington County Chamber of Commerce members that in the past year, her company has spent $4 million on new slot machines, as well as another $1.2 million on relocating table games to improve the guest experience. By year’s end, it also plans to add a dozen “stadium gaming” terminals that enable guests to wager with dealer assistance.

In 2018, the casino is looking to spend another $1.1 million on 50 additional slot machines, will spend between $5 million and $9 million to upgrade its food and beverage service, and will increase its summer concert program with 10 additional acts, as compared with this year.

Revisit tax rate?

A gambling industry strategist said Monday while Pennsylvania’s regulated online gaming and poker will be a win for the state, its unique structure presents some obstacles going forward.

According to a report released by PlayPennsylvania.com, a research site for regulated online gaming in the United States, the state will probably be able to collect as much as $120 million in upfront licensing fees and stands to collect hundreds of millions of dollars in additional tax revenue with the legalized online gambling approved Monday.

According to the report, substantial upfront license fees and a blended tax rate that is more than double New Jersey’s tax rate are among the key differences in Pennsylvania’s approach to regulated online gambling. The bill facilitates a rapid path to market and is built to foster interstate agreements with states where online gambling is also legal and regulated, including Delaware, Nevada and New Jersey.

In all, the report forecasts Pennsylvania will generate $154 million in total revenue in the first full year after legalization and regulation. Annual revenue is projected to grow to $275 million in the fifth full year after legalization.

While Pennsylvania’s unique structure makes it difficult to forecast revenue with precision, “the successes in other states suggest that online gambling will be a significant and reliable revenue driver for years to come,” said Chris Grove, a Las Vegas-based gambling industry strategist who authored the report.

“Pennsylvania’s high tax rate will force operators to cut back on marketing and promotion, and could dissuade some consumers from leaving black market sites,” Grove stated in a news release. “It is certainly possible that lawmakers will need to revisit the tax rate in order to ensure a market that works best for both the commonwealth and the casino industry that has contributed billions to Pennsylvania’s coffers.”