Fitch sees Ohio gaming saturation

Dec 23, 2012 2:44 PM

When is enough, enough? Maybe Ohio will become the poster boy for the over-saturation of casino gambling.

In a review last week by Alex Bumazhny, associate director for Gaming, Lodging & Leisure at Fitch Ratings, the author saw Ohio’s ultra-competitive casino and gaming industry reaching a point where “it meets the people’s demands.”

From the state’s point of view, he noted, revenues will continue to grow, primarily because Caesars Entertainment Corp., and its partner, Rock Gaming LLC, will open the state’s fourth full-fledged casino in Cincinnati next March.

Also coming will be the slots facilities at the state’s racetracks.

With the additional gaming properties, said Bumazhny, the state will experience “considerable cannibalization from existing Ohio gaming facilities and gaming facilities in neighboring states.”

Already, the effect has been experienced, he said, pointing to Scioto Downs in Columbus. The video lottery terminals at that racetrack, owned by MTR Gaming Group Inc., saw its business fall nearly 23 percent in October, the first month of business in which it competed with the newly-opened Hollywood Casino Columbus.

Also showing the effects of saturation, he noted, were the casinos in Indiana where some gamblers were departing in favor of the newer casinos in Ohio.

“New openings in areas seemingly devoid of gaming supply, like Columbus, still manage to meaningfully cannibalize from casinos located up to 130 miles away,” Bumazhny wrote.

Looking at the numbers, Bumazhny noted that Hollywood Casino Columbus pulled in $137 per slot machine, per day in November. This result, he said, showed the impact of competition since anything under $200 per day per machine indicates a saturation point.

Ray Poirier is the longtime executive editor at GamingToday.

Contact Ray at [email protected].

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