Thu March 6, 2014
Indiana casinos taking a hit from Horseshoe Cincinnati
There is no question that the three Indiana riverfront casinos within easy driving distance of downtown Cincinnati’s Horseshoe Casino have taken a financial hit over the past year.
But revenues have declined in all 13 Indiana venues, and none more so than the three southeastern Indiana casinos in the Cincinnati market - Hollywood Casino in Lawrenceburg, Rising Star Casino Resort and Belterra Casino.
And it has been going on for the past four years – long before Horseshoe Casino in Cincinnati opened its doors.
Ed Feigenbaum, the editor of Indiana Gaming Insight, a monthly newsletter widely read by people in the gaming industry and the Indiana statehouse, said that while Cincinnati’s casino, and the new Ohio racinos, have hurt Indiana, there are other factors at work – particularly an uncertain economy.
“The year 2013 was not a successful year for Indiana’s 13 gaming properties,’’ Feigenbaum said. “Our revenues were down by about $235 million over the prior year, for a state record.”
Of the 13 Hoosier gambling venues, only the three southeast Indiana casinos had revenues that declined by more than 1o percent over the their 2012 performance.
Feigenbaum said the largest percentage of real dollar declines in Indiana occurred at Hollywood Casino, the one closest to Horseshoe Cincinnati. At Hollywood, the annual win dropped from about $395 million in 2012 to about $272 million in 2013 – a decline of 31 percent.
Indiana’s overall decline in statewide revenues not only hurts towns like Lawrenceburg and Rising Sun who benefit from casino tax revenues, but it puts a major hole in the state of Indiana’s budget.
“Casino taxes are the third largest source of revenue for the state of Indiana,’’ Feigenbaum said. “Only the sales tax and the individual income tax bring in more. So it hurts.”
Will the gaming industry in Indiana bounce back, and will Ohio’s four casino and seven racinos be able to sustain themselves?
“I don’t know that anybody can be sure, given the economic conditions that have cut into people’s discretionary incomes in southeast Indiana, western, central and southern Ohio and Northern Kentucky,’’ Feigenbaum said. “It’s been a tough couple of years for people.”
Feigenbaum said people are making choices about how they spend their extra dollars – do they go out to dinner, go to a Reds game, go out to a movie or do they go to casino?
“Do they go to casinos as opposed to putting food on the table?,’’ Feigenbaum said. “I don’t know.”
Clearly, the numbers of people going to gambling venues in Indiana have been going down.
Ten to 12 years ago, there was a feeling in states with legalized gambling that there was no limit to the money that could be made. But when the recession of 2008 came, things changed, Feigenbaum said.
“Everybody assumed that casinos were immune to economic conditions,’’ Feigenbaum said. “But we found out otherwise as we got into 2008, 2009 and things just started to plunge all over the country, in every market.”
In Indiana, admissions at casinos statewide have been going down.
Admissions to Hollywood Casino dropped from about 3.25 million in 2012 to 2.28 million in 2013. Officials at Hollywood Casino did not respond to requests for an interview.
No one can say how many of those players are southwest Ohioans who now drive to downtown Cincinnati instead of Lawrenceburg to gamble, but the people who run Cincinnati’s casino believe they have an advantage because of their urban center location.
Horseshoe Cincinnati has taken advantage of all the attractions that surround it in Cincinnati’s central business district, said Danny Brockdorf, vice president of marketing for Horseshoe Cincinnati.
“We’ve got partnerships with the Reds, the Bengals, access to all the local attractions,’’ Brockdorf said. “So we really try to utilize our location to draft off all the other things in the city and complement them with the casino in the environment.”
Feigenbaum said the southeastern Indiana casinos can fight back by adding amenities and attractions such as sports cafes and appearances by big-name entertainers.
There will be a new hotel adjacent to the Rising Star Casino in Rising Sun. By this summer, a convention center and hotel will open in Lawrenceburg, to be operated by the casino.
That could help, he said.
But, as Feigenbaum said in his newsletter, there is no question about it ’13 – as in 2013 – was not a lucky number for Indiana’s gaming industry.