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Pa.'s gambling expansion is high-stakes for towns such as Bensalem, host to Parx Casino

The Parx Casino provides better than 25 percent of Bensalem Township's revenues, and the stakes are high for the treasuries of the 12 Pennsylvania towns hosting casinos.

A row of slot machines on the gaming floor of Parx Casino on a Wednesday afternoon. Bensalem Township, Bucks County PA, March 14th, 2018.
A row of slot machines on the gaming floor of Parx Casino on a Wednesday afternoon. Bensalem Township, Bucks County PA, March 14th, 2018.Read moreJAMES BLOCKER / Staff Photographer

It was in Bensalem Township that then-Gov. Ed Rendell signed Pennsylvania's casino gambling bill into law. At the site of what is now Parx Casino, in the winner's circle of a fading racetrack, casinos began in 2004 as a "historic" initiative to bring money to the declining horse-racing industry and tax revenue to the state.

Fourteen years later, the promised revenue has come, the Pennsylvania gambling industry is second only to Nevada's, and the Bensalem budget has been among the big winners. Parx, built up around that racetrack, is the state's most successful casino.

And, a sea change is underway as the state's radical gaming expansion creaks into motion with online gaming, mini-casinos, online lottery, and opportunities to gamble at airports and truck stops. On Monday, the state will begin accepting applications from online gaming manufacturers, suppliers, and service providers.

For the casinos, including Parx, it means more competition but also opportunities to expand, and experts say how it affects the casino bottom line remains to be seen.

For Bensalem and the 11 other host towns, it means uncertainty. Their finances remain inextricably tied to casino revenues — whether profits go up or down in the coming months.

More than 25 percent of Bensalem's general revenues are generated from Parx, outpacing the amount raised from real estate taxes. In total, the 60,000-resident township receives more than $20 million a year in fees and taxes related to the casino.

If the casino's business falters, "it would be, I would say, almost catastrophic for us," said Bensalem Mayor Joseph DiGirolamo. If the township lost its income from the casino, he said, it would have to raise taxes or make major cuts in the police department, which makes up 72 percent of the budget.

"The casino has been a great partner … not just a civic partner but a financial partner," said DiGirolamo, who has been in office since 1994. He says he does not gamble — he's been to Parx to eat but not play.

Today at Parx, the spacious single-floor gambling hall fills with an average of 20,000 visitors a day, a steady stream on weekdays, and bigger crowds on weekend nights.

On a recent Wednesday afternoon, gamblers sat in front of glowing slot machines, their heads all tilted at the same angle, fingers pushing buttons. Some held cigarettes in their idle hand (smoking is allowed on half of the open floor); others, cellphones. The sound of jingling coins poured regularly from machines — not actual bounty, but recordings to entice players.

"I'm not supposed to be here!" cracked one middle-aged man before he and a friend disappeared into the maze of machines like children ready to get lost in Chuck E. Cheese.

But his presence, and that of all his fellow gamblers, is what has made Parx the highest-grossing Pennsylvania casino and brought what is now more than $30 million a year to Bensalem, its neighboring communities, and Bucks County. In addition to the host fee and property taxes Bensalem collects from Parx (about $10 million each), the township, county, and redevelopment authority collect percentages of slot-machine and table-game gross revenue.

"It actually adds up to millions of dollars' savings in tax dollars," said Bob White, executive director of the Bucks County Redevelopment Authority, which is in charge of distributing about $3.5 million to $3.8 million a year to neighboring municipalities. Projects have included new police radios, street repairs, and stoplights that emergency responders can control.

The funding received by Bensalem itself goes to various needs: The township hired 19 new police officers when the casino opened, directs revenue to emergency services, has not raised real estate taxes — about $460 a household — in 25 years (though it instituted an earned-income tax in 2016), and sends annual homeowner assistance grants to residents that have ranged between $100 and $300 a household each year, said DiGirolamo.

Parx also reports a total of $80 million given to charities and local organizations since 2006. It has aimed "to be that kind of economic development generator that would stand tall and help the community grow as we grew," said Ron Davis, Parx's director of diversity and community development.

Outside the casino, Bensalem is a hodgepodge of strip malls and residential structures, along the northeastern border of Philadelphia. Faded signs in outdated stylings layer against one another along the edges of the crowded highways that crisscross the township.

Set off busy Street Road, Parx bears flashing digital signs but windowless walls pixelated in unobtrusive shades of tan. In 2006, operating as Philadelphia Park, it was the second casino to open in Pennsylvania, after Mohegan Sun in Wilkes-Barre. As it has expanded and been renovated, it has consistently brought in the highest slots wagers and terminal revenue of Pennsylvania's now 12 casinos, with Sands Bethlehem following in second place.

Pat Lucas, 67, of Lansdale, is one of the many locals who have forsaken Atlantic City for Parx, where she has won playing the slots several times. She and her husband can dash off early in the day and be home by midafternoon.

"It's just to get out and do something different," Lucas said as the couple finished lunch in the food court after a recent morning of playing the slots. "It's good to get a break from everything."

How the new smorgasbord of gambling activities set to launch this year will affect casinos depends on "whether existing consumers view the new options as complements or substitutes to existing casinos," said Simon Condliffe, an economist at West Chester University.

That means people will either ditch casinos for something new or will "dip more deeply into their wallets and spend more on gaming overall," he said.

Casinos such as Parx have opposed online gaming because of fears it could take away their business, just as the internet has done for countless other brick-and-mortar vendors. Under the new law, the Gaming Control Board must submit a report after the first year that will include details about whether casino business was cannibalized by new gaming activities.

But the expansion also provides opportunities. Parx's parent company secured a satellite casino license for $8 million in February, saying it was "an opportunity to leverage the skills and capabilities that we've built here at Parx to another similar casino entertainment business."

Parx declined to comment on online gaming and had lobbied against it, but the internet potentially presents the same opportunity. Parx has already launched a money-free "social gaming" site, building a list of users primed for actual wagering, and has a partnership with GameAccount Network, indicating they will be ready to go once online gaming begins.

"All the things that have allowed them to do so well in the land-based arena, assuming they're willing to make the transition [to online], should allow them to [do] quite well," said Chris Grove, a gaming analyst at Eilers & Krejcik Gaming. "From the outside looking in, it appears to me that Parx is among the most prepared for regulated online gambling in Pennsylvania."

And he predicts internet won't cannibalize casinos in Pennsylvania, given that in New Jersey, online gaming has bolstered rather than stolen casino revenue. Operators there have reported that online gaming has brought in new gamblers — the majority of online customers were not active casino patrons — and customers who do play online and on land are actually spending more time doing each than they spent at the casino beforehand, Grove said.

"It ends up being a one-plus-one-equals-three situation, as opposed to one plus one equals two or one plus one equals less than two, which is what I think some skeptics are afraid of," he said.

Still, the Bensalem mayor, overseeing a budget now reliant on Parx's success, wonders how much wagering can expand before the state is saturated.

"To me, it's kind of killing the golden goose that lays the eggs,"  DiGirolamo said. "I don't know how far they can take gambling. The more they put in, to me, the more it's going to deplete us here."