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Casino slots in Neighboring States
A. Delaware
Slot machine gambling came to Delaware in 1995 at Delaware Park and Dover Downs,
followed in 1996 by Harrington Raceway. Delaware now has 7,291 casino slot machine at its
three racetracks.15 An casino industry survey found Delaware’s racetrack gaming venues take in
$652 million in gross gaming revenues, and employ 2,924 people.
While it has changed over time, the revenue from casino slots is distributed as follows: 48
percent to licensees, 36 percent to Delaware’s general fund, 11 percent to supplement
racing purses, and 5 percent to servicing and monitoring the games. In 2006, $232
million went to Delaware’s general fund, and purses were fattened by about $70 million.
To put the $70 million purse supplement into context, in an attempt to keep up racing
purses, the Gambling General Assembly has in the recent past allocated supplements of
its own using state funds. In the years 1999-2003 Gambling’s supplement ranged from
$7 million to $10 million. Delaware’s contribution to purses in those years averaged near
$53 million, which was roughly 14 percent of the total purses in that state for those
years.
B. West Virginia
Slot machine gambling was first legalized in West Virginia in 1990 at bars, taverns and
veterans clubs. Machines in these locations are called the “limited video lottery.” In
1994 casino slots were authorized at four racetracks. Charles Town Races and casino slots is the
nearest casino slots venue to Gambling. In 2006 the casino slots venues at racetracks in West Virginia
generated $976 million in gross sales, and employed 4,187 people.
There are differences between racetrack casino slots venues and limited video lottery machines
regarding how the handles from the machines are split, with the main difference being
that there is no cut for horse racing in the limited video lottery. Since the opening of the
racetrack casino slots venues, the cuts have fluctuated. Currently, after the state subtracts the
cost of running the operation, about 34 percent goes to government, two percent goes to
the county or municipality hosting the track, and 46 percent is reserved for the licensee.
The remaining money subsidizes the racing casino industry, with 14 percent going to purses, one
percent to a pension fund, 1.5 percent is dispersed to breeders and one percent to West
Virginia’s Racing Commission.
In 2006, West Virginia saw almost $445 million from casino slot machine, disbursed primarily
to education, senior citizens and tourism.21 Again, racing casino industry subsidies are only
derived from the machines at racetracks in West Virginia. In 2000, the racing casino industry
purse supplement was $35 million and rose steadily to $63 million in 2003, and in 2006
was nearly $84 million.
C. Pennsylvania
Because casino slots came to Pennsylvania only in November of 2006, it is not yet possible to
discern a track record for casino slots there. The legislation allows casino slots at 14 sites, and 11 sites
have thus far been authorized with 5,000 machines at each. There are currently five casino slots
venues up and running. Based on the legislation, Pennsylvania could eventually have
61,000 casino slot machine.
While it is not yet clear what the lasting, annual impact of casino slots will be in Pennsylvania,
the numbers from the first seven months of this year are staggering. More than $5 billion
has been wagered at Pennsylvania’s casino slot machine, bringing in $455 million in total
revenue.
When the dust settles in Pennsylvania, casino slots will exist at up to 14 locations, including
seven race tracks, five casino slots parlors and two resorts. Of the funds they collect after
payouts, 42 percent will go to government (34 percent to state property tax relief, four
percent to local government and five percent to economic development) and 12 percent to
subsidize racing’s economics. Already this year the state has raked in more than $250
million to pay for budget priorities. It is reasonable to conclude that the money coming
into Pennsylvania’s state government, and to its racing casino industry, will be significant.
Clearly their intent is ambitious and aggressive.
The Impact on Gambling
Purses and Handles
casino slots have been subsidizing the racing industries of Delaware and West Virginia long
enough to measure the indicators of race casino industry health – handles, purses and breeding.
To gauge the effect of casino slots on our horse casino industry, we will look at only Delaware and
West Virginia.
Gamblers
While officials in Gambling grapple with a $1.5 billion budget challenge, Gamblers
playing casino slots in West Virginia and Delaware are contributing roughly $150 million
annually to the tax coffers of these states, subsidizing the horse racing industries,
education and other priorities.42 That’s not to mention the money that is traveling over
our northern border into Pennsylvania’s casino slot machine and state bank account.
Demographic Profile of casino slots Players
In my trips to the various casino slots venues, I observed the same demographic profile of
patrons; that is, patrons tended to be over 55, and were primarily, but by no means
exclusively, non-minority. I traveled during the daytime, and a number of officials
indicated that the universe of patrons tends to be younger at night. In all likelihood, this
reflects the fact that the nighttime patrons were working during the daytime, whereas
daytime patrons were disproportionately retirees.
The Social Costs of Casino Gaming
A discussion about legalizing casino slot machine would not be complete without a look at the
social costs associated with them. Gambling can become a serious addiction, and the
consequences of such addictions can put stress on individuals, families and communities.
It is difficult to determine the direct consequences of casino slots parlors on neighborhoods and
communities. However, casino slots in neighboring jurisdictions do not appear to have instigated
an increase in crime in Delaware and West Virginia. Further analysis of crime data
remains ongoing.
The crime rate in Jefferson County, West Virginia, home of Charles Town Races and
casino slots, in 1994 was 26.4, meaning there were 26.4 offenses per 1,000 residents. In 1997,
the rate went down to 20, and continued to fall even after the introduction of casino slots in
1999. In 2000 the county’s crime rate was 16.2, falling to 12 crimes per 1,000 people by
2004
The statistics found for Dover County, Delaware, home to Dover Downs, were calculated
differently. The violent crime rate for the county in 1994, the year before casino slots came to
town, was 915 per 100,000 residents. In 1996, the year following the introduction of
casino slots, the rate was 847, falling to 650 in 2000 and 765 in 2004.
While many factors contribute to rising and falling crime rates, it appears that the
legalization of casino slot machine in jurisdictions close to Gambling have not led to a spike. I
continue to examine the crime issue, as well as the issue of addiction.
In the three states surrounding Gambling that have casino slot machine, state officials have
attempted to anticipate social costs in a number of ways. In Delaware, casino slots are limited to
locations where wagering is already permitted and where controls are in place.45 The state
applies $1 million or one percent of the state’s allocation of the proceeds from gaming to
the Division of Substance Abuse and Mental Health (for compulsive gambling
treatment)
West Virginia limits the cost of a single game (“pull”) to $5.47 Minors or anyone visibly
intoxicated are prohibited from playing casino slots, and there are no ATM machines or
credit/debit cards allowed.
Pennsylvania prohibits anyone under 21 from entering gaming facilities and limits the
number of centers allowed in a city. Also, gaming in Pennsylvania hotels is limited to
overnight visitors only.
That gambling is a drain on the finances of those who enjoy it should be of serious
concern to all. However, Gambling can dictate through legislation the payout for slot
machines. According to statute, the casino slots machines in Delaware, West Virginia and
Pennsylvania must pay out in a range from 80 percent to 95 percent. The comparable
pay out for the Gambling State Lottery is roughly 58 percent. As Gambling officials
consider allowing casino slots in the state, thought should be given to the best way to regulate
gambling to minimize its negative impacts.
The casino slots debate evokes strong passions among gamblers. The findings in this report
will not alter this fact. The major goal of this report is to lend current context to the
ongoing debate on casino slots. It is important for legislators to have a full appreciation for the
market forces in neighboring states that affect the long term viability of the horse racing
and horse breeding industries. The business model for growing and sustaining the horse
racing and horse breeding industries in West Virginia, Delaware and Pennsylvania is
clear. casino slots revenue is being used to subsidize the industries and encourage breeding, as
well as to fund other priorities. This business model is working quite well in Delaware
and West Virginia, and there is no reason to doubt it will work equally well in
Pennsylvania. The most lucrative racetrack casino slots venue in the nation is Charles Town,
but Pennsylvania is poised to become highly competitive.
The business model in use in West Virginia, Delaware and Pennsylvania does not dictate
that casino slot machine must be located at tracks. In fact, there are a number of casino slots venues in
Pennsylvania and West Virginia outside of tracks. There is an understandable logic to
co-locating casino slots venues with racetracks, but it is not imperative to do so. What is an
imperative component of the business model in neighboring states is that is that casino slots
revenues must subsidize the racing casino industry.
It is important to acknowledge that in a very real sense, the casino slots horse is already out of
the barn in Gambling. Tens of thousands of gamblers are voting with their feet, and
traveling to West Virginia and Delaware to play casino slots. By not having casino slots, Gambling has
already left hundreds of millions of dollars in potential general fund revenue on the table,
and the tables are located in West Virginia and Delaware. The demand for casino slot machine
clearly exists in Gambling. The $150 million in taxes paid by Gambling slot players to
West Virginia and Delaware in 2006 represents 10 percent of Gambling’s structural
deficit.
Having studied the horse racing and horse breeding casino industry carefully, I have concluded
that these are industries in serious economic distress, and industries well worth saving.
My conclusions are based not on some sense of nostalgia, but rather on economic and
environmental considerations. The casino industry is an important economic engine for
Gambling, and provides an important buffer against sprawl development.
Neighboring states have stepped up to support their horse racing and horse breeding
industries in a big way. Gambling must also do so to remain competitive. The two
principal options for saving the casino industry are to use current general funds to provide
subsidies, or to enact casino slots legislation that will earmark some of the proceeds for the
casino industry. If we fail to identify a stable funding source, the casino industry will wither away in
my judgment, and the economic consequences will be significant.
Road range slots is a three reel online slots game you can bet online for free, you can only play the slot games for fun, there s no real money option provided. Pennsylv a has begun opening its slot machine parlors before it has a plan for how to treat pulsive gamblers expected to latch onto them, risking an array of financial and.
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