CORRECTION: This story has been modified to correct mistakes in the payout percentage for Rising Star Casino, promotional spending by Belterra Park and the story's first quote by Todd George.
CINCINNATI -- As Cincinnati’s casino market tightens, the slot machines are loosening.
A WCPO analysis of monthly revenue reports from casino regulators in Ohio and Indiana shows the payout percentage on slot machines gradually increased this year to 90.59 percent as two new rivals ramped up racinos in Anderson and Turtlecreek townships.
That means more money in the pockets of local gamblers.
“The big winners in all this gaming expansion are the customers,” said Todd George, general manager of Hollywood Casino in Lawrenceburg. “You need to really make it so you’re worth the trip. If somebody is going to take the time to choose you over one of your competitors, the last thing you want to happen is for them to go through their gaming budget in a short amount of time.”
For every $100 plunked into slot machines in June, $90.59 went back to gamblers. That’s 23 cents more than in March and April. It may not seem like a lot until you consider those machines racked up $516 million in June bets. So, an increase of 0.23 percent translates to $1.2 million more in payouts.
At the same time, the amount of promotional spending by casinos – including free money for slot machine credits, food and other perks – surged 30 percent between the first and second quarters of this year, reaching $21.6 million in the three months ended June 30.
George said casinos are using multiple techniques to build loyal customers, including concerts, complementary meals, free-play vouchers and – in Hollywood’s case – a new convention facility that opens this fall and already has 20 events booked this year. George said competitive markets are known for having lower hold percentages on slots wagers.
“If you were in a monopoly-type situation, you could have your hold percentage wherever you want,” George said. “In a really competitive environment, you want people to come in and enjoy themselves and earn comps and cash back.”
Total spending in all Cincinnati area casinos increased 5.9 percent in June to $54.2 million, but casinos open at least a year saw double-digit revenue dips as Belterra Park in Anderson Township completed its second full month and Miami Valley Gaming near Monroe hit month seven.
“Everyone’s aware that the market’s a little softer than we projected,” said Jim Simms, general manager of Miami Valley Gaming. “When your business grows on discretionary income, that means people need to have a job. They need to feel secure. They need to have consumer confidence. The world is a little more cautious than it was back prior to 2008.”
Here’s how the market shakes out:
· Horseshoe Cincinnati ranks first with a 28.2 percent market share and $15.3 million in revenue, down 13.3 percent from last year.
· Hollywood Casino in Lawrenceburg declined 27.3 percent to $14.7 million and a 27.1 percent share of all gaming revenue.
· Miami Valley Gaming ranks third with an 18.4 percent share and $9.6 million in revenue, down 12 percent from May.
· Belterra Casino Resort in Florence, Ind., held a 12.4 percent share with $9.7 million in revenue, down 21.8 percent from last year.
· Rising Star Casino dipped below $4 million for the second time since January, but held on to fourth place with a market share of 7.2 percent.
· Belterra Park, at the former River Downs horse track, finished last with $3.7 million in revenue and a 6.8 percent share.
Comparing slots figures between states is difficult because Ohio and Indiana casinos report their numbers differently to state regulatory bodies. Ohio allows casinos to deduct promotional credits from gross revenue, while Indiana numbers are not adjusted. Hollywood Casino said promotional spending should be added to the Ohio figures to make an "apples to apples" comparison. But Horseshoe Casino Cincinnati said no adjustment is needed because promotional spending goes to gamblers, not the casino. If you adjust the figures to include promotional spending, all three Ohio casinos rank at the bottom.
In both cases, however, Rising Star Casino had the loosest slots, paying out 91.72 percent of all dollars played in slot machines from January to June.
Miami Valley Gaming ranked second, with an unadjusted figure of 91.67 percent. It also led the region in promotional spending at $13 million.
“Our marketing strategy is about giving them several pieces that add up to a great experience,” Simms said. “It’s not just about what the machine gives out. It’s about the marketing rewards, the sign-up bonus, the jackpots and things like that. We’re not overbuilt, not over pretentious. We’re trying to be a place where people can come and have a comfortable experience without breaking the bank.”
Horseshoe Casino Cincinnati, which ranked second in total payouts at 91.49 percent, said it made no recent changes to its promotional spending or slot
machine hold percentages. Sometimes, a casino’s hold percentage rises or falls because of the machines gamblers choose. Penny slots have higher holds, while quarter and dollar slots are set to pay out at higher percentages. Horseshoe reported $11.9 million in promotional spending from January to June.
“We’ve not made any casino floor moves in several months,” said Daniel Brockdorf, vice president of marketing for the Cincinnati property. “Promotional spending is contingent on gaming volume. There was some intentional increase last year. Now, we’ve achieved a state of spending that we’re comfortable with.”
Here's how all six casino rivals fared in a WCPO analysis. We included an adjusted figure for Ohio casinos to show how promotional spending affects the payout percentage.
· Rising Star, 91.72 percent payout; 1,153 slots.
· Miami Valley Gaming, 91.67 percent payout (89.85 percent after adjustments); 1,595 slots.
· Horseshoe Casino Cincinnati, 91.49 percent payout (89.95 percent after adjustments); 1,968 slots.
· Belterra Casino and Resort, 90.92 percent payout ; 1,209 slots.
· Hollywood Casino, 90.8 percent payout; 2,248 slots.
· Belterra Park, 90.23 percent payout (89.07 percent after adjustments); 1,471 slots.
Despite the recent increase, local payouts are well within industry norms and they haven’t changed enough to make slots a better option than table games in terms of percentage payouts to gamblers.
But they’re still better than lottery payouts and they vary by casino.
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