Ohio Newspaper Association

Working with the Casino Industry

Alan Silver

Ohio University

May 16, 2013

US COMMERICAL CASINOS

Spectum Gaming Group• The analysis offered the following GGR

projections for the year 2013:

• Scenario 1: Four casinos with both slots and tables games could generate at least

• $1.8 billion in GGR at the following locations:

• Cincinnati – $369 million (Est. $230 Million)

• Cleveland – $568 million (Est $ 263 Million)

• Columbus – $602 million (Est $230 Million

• Toledo – $265 million ( Est $182 Million)

Spectum Gaming

• Scenario 2: Four casinos with both slots and table games along with up to 2,500 VLTs at each of the seven existing racetracks in Ohio could generate nearly $2.25 billion in GGR:

• The average GGR per casino/VLT location would be $205 million.

• The four casinos with both slots and table games could generate $1.1 billion in GGR (48.9% of state total), or average GGR per casino of $276 million.

• The VLT casinos at the seven racetracks could generate slightly more than $1.15 billion (51.1% of state total), or average GGR per VLT casino of $165 million.

Moelis & Co• 2.7 Billion GGR from both casino &

Racinos (VLT’s)

• Assuming cannibalization from having both, the total market is expected to be $2.3 billion at a steady state

Where did Projections come from?• Annual Gross casino revenue with

VLT’s ODT issue 3 Casino Ballot Initiative Memo Oct 2009$1.4235 billion

• Annual Gross VLT Revenue with Casinos Ohio Statewide Racetrack Casino Assessment/March 2011$1.2658 billion

Total Casino & VLT Market Size$2.6893 Billion

My Projections 1st full yr.

» EST

• Horseshoe Cleveland: $274M

• Horseshoe Cincinnati: $245M

• Hollywood Columbus: $225M

• Hollywood Toledo: $190M»

$934 MILLION

What is your “objective” in Casino Management?

• “maximize profit”

Margin

• The Percentage of Win that remains

after expenses (e.g., dealer salaries,

benefits).

Departmental Margins

Department Margin

Slots 60%-70%

Table Games 15%-20%

Ohio Casinos

2012 2013 YTD

Tables: 28% GGR 31% GGR

Slots: 72% GGR 69% GGR

Ohio Slot WPD-/ AprilMarch

• Hollywood Toledo: $215$227

• Hollywood Columbus: $161$173

• Horseshoe Cleveland: $216$280

• Horseshoe Cincinnati: $220$283

• Scioto Downs: $180$193

• Thisledowns: $331

• State Wide Avg 4 Casinos: $200.43

Pennsylvania WPD- April• State Average: $262.27

Mohegan S $266 Parx $313

Harrah’s $246 Presque $230

Meadows $202 Mt. Airy $209

Pina Nat $277 Sands $270

Rivers $278 Sugar H $322

Valley F $300

Indiana Slot WPD- AprilAmeristar 326 Horseshoe SI 454

Beltera 240 Indiana G 327

Blue Chip 301 Maj Star 304

French Link 189 Maj Star II 257

Hollywood 301 Rising Star 156

Hoosier 277 Horseshoe HD 460.27

State Average: $293.52

How does Ohio Compare?Win Per day Slots

April• Indiana: State Average $293.52

• Pennsylvania: State Average $262.27

• Ohio: State Wide Avg. Casinos $200.43

Scioto Downs• Doing extremely well for MTR

• Head-to-head competition w/Hollywood has heated up. Promo Play increased.

• 10 Months YTD: $113,314,099

• Full Year (my est): $135,976,918

• Spectum Report: $165 Million each

• 7 Racinos @165 Million= $1.15 Billion

20

Key Revenue SourcesIntegrated Resorts

Figure 2.1Relative Revenue Contributions: Top 5 Sources

Las Vegas Strip Integrated Resort

Table Games23%

Hotel26%

Slots18%

Show room8%

Food & Beverage25%

21

Key Profit Sources Integrated Resorts

Figure 2.2Relative Profit Contributions: Top 5 Sources

Las Vegas Strip Integrated Resort

Food & Beverage15%

Hotel38%

Slots27%

Show room5% Table Games

15%

22

Las Vegas Repeater-Market Resort

• Any critical observations here?

Relative Revenue & Profit Contributions: Top 5 Sources

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26%

6%

66%

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16%

11%

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10%

20%

30%

40%

50%

60%

70%

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