Ron Baumann, right, senior vice president and general manager, assists a patron at Harrah’s Casino Thursday, May 24, 2012 in Chester, Pa. When Harrah’s Chester Casino & Racetrack opened its doors in this struggling city in January 2007, it was the state’s third casino, a novelty that pulled in Philadelphia-area gamblers thrilled not to have to drive to Atlantic City. Five years later, Pennsylvania has 11 casinos, four in the Philadelphia area. Harrah’s casino in Chester, a long-downtrodden city in the southern suburbs, also is closer to competition in Delaware and Maryland. (AP Photo/Alex Brandon)
CHESTER, Pa. (AP) — When Harrah’s Chester Casino & Racetrack opened its doors in this struggling city in January 2007, it was the state’s third casino, a novelty that pulled in Philadelphia-area gamblers thrilled not to have to drive to Atlantic City.
Five years later, Pennsylvania has 11 casinos, four in the Philadelphia area. Harrah’s casino in Chester, a long-downtrodden city in the southern suburbs, also is closer to competition in Delaware and Maryland.
“We’ve certainly felt the pressures,” said Ron Baumann, the Chester casino’s general manager and a veteran of Atlantic City, where casinos have seen their revenues plummet amid heightened competition from Pennsylvania. “The Atlantic City lesson is certainly one that we all [auth] need to learn. … You just always, always have to be creating a competitive advantage.”
To fight back, the casino is trying to rebrand itself and increase the quality of its offerings.
Earlier this month, it announced it was rebranding itself Harrah’s Philadelphia to give customers a better idea of where it is. It is upgrading its restaurants and starting to hold concerts on its new patio and on its racetrack, efforts geared toward becoming a “night out” destination for customers farther away.
While Harrah’s business remains above both its own projections and those of the Pennsylvania Gaming Control Board, the slots losses have the casino operators scrambling.
“Our plans call for growth this year,” said Baumann, who is focused on getting more of the estimated 8.5 million gaming adults within a 60-mile radius around the casino. “Are we content with where we’re at? No.”
Last year, gross revenue from slots was $268.1 million, a 10 percent decrease from the year before. In 2010, it was $296.5 million, down 6 percent. Overall, slots revenue has been declining since its peak of $328.3 million in 2008, the second year of operation.
When slots and table games revenue are combined, the picture isn’t as bleak. Table games, which were introduced in July 2010, generated more than $30 million in additional revenue in 2010, for a total gaming revenue of $336.5 million — an increase of 3 percent. Last year, the first full year of table games generated nearly $81 million in gross table revenue, helping boost the total gaming revenue to $349 million — up 7 percent.
Kevin O’Toole, the gaming board’s executive director, doesn’t find the effects of competition on Harrah’s alarming.
“It’s the casino operator’s responsibility to strategize their own situation and make whatever adjustments it would take to meet the competition,” O’Toole said. “Their slots have gone down, but I don’t think they have gone down in any sort of alarming fashion.”
Harrah’s is fighting desperately for market share against Sugarhouse Casino in Philadelphia; Valley Forge Casino Resort, which opened in March; and Parx Casino, which opened a month before Harrah’s in the northern suburbs.
The industry is closely watching the Philadelphia market to see how the facilities do amid the increased competition. Some analysts worry the market is approaching saturation, while others describe a market that is still evolving. A second license is currently slotted for Philadelphia, but some legislators are advocating bidding it statewide.
Pennsylvania has grown into the second-largest gambling market in the country behind Las Vegas as Atlantic City’s revenues have steadily declined. For Harrah’s, the lessons of Atlantic City loom large. Besides its restaurant and entertainment upgrades, it’s also switching out slots games more often to keep them new.
The rebranding is meant to appeal to a broader swath of customers. As part of the change to Harrah’s Philadelphia, the casino has a neon red Liberty Bell on the wall in the gaming room and is opening a Tony Luke’s cheesesteak stand.
Lou Meren, 81, of Parkville, Md., drove 90 miles from his home to play video poker at Harrah’s on Wednesday, despite closer options in Maryland and Delaware. He was drawn there by the allure of perks he could get if he went enough times — and because he likes Harrah’s facilities.
“I guess force of habit is the reason,” he said. However, if a Harrah’s opened up in Baltimore, he said, he would probably go there more often.
Kevin Coates, a table games shift manager at Harrah’s, said dealers are focusing on trying to recruit new customers, especially if they see someone at their table has come from farther away.
“It’s more of a relationship-building exercise,” Coates said. “Getting them in the door is the hardest part.”