In the next two to three years Maryland is expected to get slot machines. Voters just approved locating up to 15,000 machines in five counties. The addition of slot machines in a neighboring state is expected to adversely affect West Virginia’s most lucrative race track:
For years Maryland lawmakers have struggled with whether to allow slot machines. Voters solved the problem by approving a constitutional amendment allowing the machines. The General Manager at the Charles Town Races and Slots, Al Britton, expects his track to suffer as slot machines come on line across the border in Maryland:
“We’re a convenience market, so anything that’s more convenient to our primary market, which happens to be Maryland, DC and Northern Virginia will have an impact,” Britton says.
What kinds of things will Penn National do here to offset any loses?
“We’ve already begun some of those things,” Britton says. “We just opened a new 153-room hotel which exceeded everyone’s expectations. We’ve kicked off a tiered player card program, a loyalty program, to try and increase customer loyalty. And in general we focus on customer service.”
West Virginia Lottery Commission figures show about 70% of the track’s customers come from Maryland and Virginia while another 14% come from Pennsylvania. Britton can’t yet estimate how much business Charles Town will lose. He doesn’t expect the machines in Maryland to begin operating for another two or three years. Eventually there will be 15,000 machines in five Maryland locations: Allegheny, Worcester, Cecil and Anne Arundel Counties as well as Baltimore City.
“What we don’t know is specifically what those facilities will look like from a size standpoint, how many slot machines they will offer and so until we have a little more information really it’s, we don’t have an idea as to what the specific impact will be,” Britton says.
According to the West Virginia lottery commission slot machines at the state’s four race tracks brought in nearly $900M between June of 2007 and July of this year. About half of that came from Charles Town. The Charles Town Races and Slots is the only West Virginia track that can’t offer table games. The measure failed during a referendum in June of last year. The track has to wait two years before asking for another vote. With slots on the horizon in Maryland, Britton says the track is studying the idea.
“Because of some of the environmental changes, I’ll call them, with the economy being as it is and with Maryland passing the slots initiative has the opinion of the community changed in terms of favoring table games versus the last time we ran the referendum,” Britton says.
If table games were allowed how would that help with the Maryland slots? Why would that make a difference?
“We do regular surveys of our customers and the number one answer to the question ‘where else do you spend your gaming/entertainment dollars?’ is Atlantic City casinos,” Britton says. “So table games here would keep some of those folks here. Even some of the folks where the slot licenses are approved in Maryland would at least make occasional trips here even if the Maryland casinos were more convenient.”
Britton says the company that owns the Charles Town track, Penn National, would have preferred that slots in Maryland not pass. But because polls before the election favored slots, Penn National invested in property in Cecil County, Maryland, near the Delaware border.