Funny that we should have been discussing Pennsylvania yesterday. Fitch Ratings analyst Alex Bumazhny made a field trip to Philadelphia and Bethlehem, and came away impressed by the $164 million expansion of SugarHouse. He concluded that its new 
features, which include a high-limit area and expanded restaurant offerings, made SugarHouse “much more of a regional competitor … As opposed to an urban-centric casino.” Caesars Entertainment is also reinvesting at Harrah’s Philadelphia, laying down new carpeting and carving out a party lounge. Electronic table games are evidently doing so well up at Sands Bethlehem (Bumazhny found Sands’ to be “very busy … Especially baccarat”) that Philly casinos are already talking about following suit. And although I wasn’t aware of any uncertainty surrounding Cordish Gaming‘s south-Philadelphia casino project, the consensus among gaming execs surveyed was that it would move forward … “eventually.”
Bumazhny projects a flat 2017 for operators and suppliers alike. “Those looking on robust growth to delever will have to look to other avenues … Growing employment and median wages will help offset secular headwinds, including the retirement of baby boomers, the sector’s core demographic.” (Penn National Gaming is shifting to a focus on Generation X, calling it the “sweet spot” for the company’s offerings.) Traditional gambling will also have to fend off the spread of VLTs, social gaming and instant-ticket lotteries. On the brighter side, increased air capacity into Las Vegas is expected to buoy room revenues at a low single-digit rate, as non-gambling revenues relieve the pressure of “weak baccarat play.”
Next year, Macao gambling revenues are expected to grow 5% or so, having “found a bottom … This, plus the accelerated ramp-up of the mass-market-oriented Studio City, 
tells us that Macau’s mass market is starting to respond to the new capacity. This bodes well for [MGM Resorts International] and [Sociedade de Jogos de Macau], which have yet to open their Cotai expansions.” (More aggressive, JP Morgan projects 7% to 12% growth next year.) A 15% jump in November VIP play didn’t hurt. Meanwhile, the central government has moved on to taxing the purchase of luxury cars an extra 10%, both to promote fuel efficiency and discourage Chinese from flaunting their wealth. Speaking of expansion, Bumazhny finds it unlikely in Singapore, where gross gaming revenues are in a slump.
* Tioga Downs owner Jeff Gural was on the verge of tears when the racino finally reopened as a full-fledged casino. He and others felt that the raised status was only Gural’s due after he bankrolled efforts to expand casino gambling in New York State and especially after he rescued Tioga Downs from destitution 10 years ago. Harness racing is still on the bill of fare and if you’re under 21 that’s the only form of wagering you’ll be able to enjoy. In the casino, 23 table games take pride of place, with 461 of an eventual 944 slots described as being off to the side.
Although he was the last of four Empire State casino developers to be granted a license, Gural was the first to the finish line, thanks in part to existing VLT infrastructure. While Tioga Downs has pledged $1 million to the City of Nichols and Tioga County, refreshingly circumspect local politicians are refraining from booking the revenue just yet, even though Gural brags, “I don’t know if anybody in Nichols [annual budget $1.5 million] will be paying taxes.” “We haven’t seen it yet. Once we see it then we will decide,” said Nichols Councilwoman Barbara Crannell. “No sense in spending money you don’t have.”
* Just for the record, Lucky Dragon Casino had its grand opening last weekend. (The casino had already been open for two weeks, however.) Not even lion dances and firecrackers were enough to distract gamblers from their play more than momentarily. Judging from early reports, Lucky Dragon is on track to success, which might be the tonic needed to accelerate the sleepy pace of redevelopment on the north Strip.
“No sense in spending money you don’t have.” What a novel idea…good for them!