Pennsylvania kicks A.C. off No. 2 gambling spot

Pennsylvania has overtaken Atlantic City as the No. 2 U.S. gaming market after Las Vegas.

In 2012, Pennsylvania took in $3.16 billion from both slots and table-games revenue, according to figures released Wednesday by the state Gaming Control Board. Last week, the Shore resort reported $3.05 billion in casino revenue for 2012.

All the signs were pointing to a knockdown. Pennsylvania had grossed $3.1 billion in total gaming revenue in 2011 - and that was before the opening of Valley Forge Casino Resort in March.

Pennsylvania's achievement of the milestone in just six years - its first casino opened in November 2006 - can be attributed to its large population, which includes a sizable number of elderly residents, and the casinos' locations.

There are currently 11 venues up and running - soon to be 12 with the opening of a casino in western Pennsylvania, at the Nemacolin Woodlands Resort. And six groups currently are vying for the right to open the 13th, in Philadelphia.

"Pennsylvania grew so fast because the casinos are located throughout the state and located closer to the main population centers," said gaming analyst John Kempf, of RBC Capital Markets L.L.C. "Location is everything in gaming. Customers would rather spend more time gambling than driving. But it also helps that casinos are across the state and not just in one city."

In New Jersey, Atlantic City has exclusive rights to gambling - the state's dozen casinos all are located there.

"The difference between Pennsylvania and Atlantic City, when it comes to gaming, is that Pennsylvania policymakers made a conscious decision to put gaming where the population is, and New Jersey policymakers made a conscious decision to put gaming away from the population centers," said Michael Pollock, managing director of Linwood, N.J.-based Spectrum Gaming Group L.L.C.

"Pennsylvania is a large state that borders populous areas as well, and the gaming operations were placed in a way that makes them convenient to multiple population centers, in state and out of state," Pollock said. "Atlantic City is not designed for convenience."

The state's perennial gross-revenue leader has been a racetrack with slots and table games: Parx in Bensalem, which draws from Northeast Philadelphia, Bucks County, and Central Jersey.

"Pennsylvania knew that it had to compete with Atlantic City in the sense that the gaming facilities and the amount of [payouts] couldn't be any less than what is offered in Atlantic City, even though we are paying over six times the amount in tax," said Bob Green, chairman of Greenwood Gaming and Entertainment Inc., which owns Parx.

"The convenience and the time saved [driving] becomes an additional benefit. It's a significant bonus in our favor," Green said. "When you come [to Parx], you are going to get energy, entertainment, excitement. . . . It's an exceptional night out. It's a grown-up experience. It's not humdrum."

Former Gov. Ed Rendell, who championed gambling in Pennsylvania and signed the measure legalizing it in summer 2004, said he was not surprised by the gaming industry's rapid growth in the state.

"When I said gambling would produce $1 billion in tax revenue, they [the media and the Republicans] really mocked me," Rendell said Wednesday on his way to catch a flight.

"I knew we would succeed," he said. "I had read all the studies that said Pennsylvanians were leaving the state and gambling in other states, and we were not getting any benefit at all."

"The tens of thousands of jobs . . . translating to direct and indirect development throughout our casinos and racetracks, is vindication for me," Rendell said. "And the 150,000 seniors who have had their school property taxes zeroed out by gaming tax revenue, and another 200,000 seniors who had them cut by 50 percent."

The news was no shock to Linda Nieves of Middlesex County, N.J., either.

"Because it's so close, a lot closer than Atlantic City," she said while playing a penny slot machine at Parx Monday night. "This is taking a big chunk from Atlantic City."

Nieves, 50, who describes herself as an occasional gambler, said she go to the casino on her way home from visiting her daughter, a graduate student at the University of Pennsylvania.

"There's no tolls. It's very convenient to get here. It's a straight line," she said. "Plus, they give us comps [coupons] to eat and gamble, which Atlantic City has cut back on."