- 1 Hollywood Casino: A Long Time In The Making
- 2 Hollywood’s juicy market
- 3 Size and Revenue: Middle of the pack
- 4 Hollywood Casino at Penn National is just one of many
- 5 Regional monopoly
- 6 License allowances and restrictions
- 7 Penn National and online gambling
When the Pennsylvania State Horse Racing Commission announced it was legalizing pari-mutuel wagering in the Keystone State in the 1960s it was assumed one of the four licenses would go to a group representing the capital region. The Penn National Turf Club Inc. was incorporated in March 1968 to chase the license it won on November 20.
A few things would quickly come to set Penn National apart from the nation’s other 53 thoroughbred tracks. For one thing the flat racing would take place under the lights rather than in the afternoon. For another, the plant would never go dark—horses run in Grantville twelve months a year.
Hollywood Casino: A Long Time In The Making
Mostly what set Penn National apart from its fellow tracks was the size of its ambitions.
After champing at the bit under the restrictions of the original license to only hold 100 racing days per year the track lured a rival operator, Peter D. Carlino, who was using his 100-race license with the Mountainview Thoroughbred Racing Association, to Grantville.
Carlino would add Pennsylvania’s first turf course in 1978 and he bought Penn National, now with its 200 days of live racing, in 1981.
Under Carlino, Penn National opened the state’s first telephone wagering system. Tagged “Telebet,” the track permitted handicappers to deposit funds with Penn National and place bets from the accounts with just a phone call.
To help keep gamblers apprised of the goings-on at the track the company started its own television program called Racing Alive that provided inside dope on the races, handicapping advice and interviews with racing personalities.
In 1992 Carlino opened Penn National’s first off-track wagering facility and two years later took the company public as Penn National Gaming to raise funds for further expansion. Soon Penn National had opened six off-track betting sites—the maximum allowed by Pennsylvania gaming law.
In 1996 Penn National gobbled up Pocono Downs, the harness track in Northeast Pennsylvania. As important as the racetrack to the deal was the right to open five more off-site gambling rooms.
Also that year Penn National entered negotiations to renovate the 60-year old Charles Town Race Track in West Virginia—provided voters approved the installation of video gaming machines at the track. When they did, Penn National, with an 89 percent stake in Charles Town, was in the gaming business.
Before the decade was out Carlino had signed agreements to buy a pair of Mississippi casinos.
In 2004 Penn National Gaming secured one of the 14 slot machine licenses awarded by the Pennsylvania Gaming Control Board. Rather than remodel the then-32-year old racing plant the company decided to tear down the facility and construct a new fully integrated racetrack-casino.
It opened on February 12, 2008 under the banner of Hollywood Casino at Penn National Race Course.
Hollywood’s juicy market
Hollywood Casino at Penn National in Grantville has the South Central Pennsylvania gaming market all to itself. That includes the Harrisburg-Lancaster-York population center that is the nation’s 39th largest.
The casino can also siphon off visitors to two of the state’s most popular tourist centers: Gettysburg, site of the bloodiest battle of the Civil War, and Hershey, home to the world-famous chocolate company and HersheyPark, the state’s biggest amusement park.
The casino is triangulated 15 minutes between Harrisburg and Hershey, off Exit 80 of Interstate 81; it is also less than 20 minutes from Exit 247 of the Pennsylvania Turnpike.
Size and Revenue: Middle of the pack
Pennsylvania’s mid-state casino rests securely among the Commonwealth’s mid-size casinos. Hollywood Casino offers 70 table games and 2,456 slot machines.
On paper they appear to be a middle-of-the-pack casino, but there is a significant drop-off after the top eight casinos. Hollywood Casino is officially seventh out of the state’s 12 casinos in terms of revenue. However, its revenue numbers for 2015 are only 14 percent behind the fourth highest revenue generator, Harrah’s Philadelphia’s, year-to-date total.
Conversely, Penn National’s Hollywood Casino generates 32% more revenue than Mount Airy, which is ranked just two spots lower at #9.
2015 casino revenue by operator in Pennsylvania through April 2015
- Parx – $171,181,594
- Sands Bethlehem – $162,593,150
- The Rivers – $118,178,351
- Harrah’s – $97,639,896
- SugarHouse – $94,031,528
- Mohegan Sun – $86,391,730
- Penn National – $84,833,689
- The Meadows – $79,650,980
- Mount Airy – $57,960,739
- Presque Isle – $41,197,844
- Valley Forge – $37,431,398
- Nemacolin – $11,077,835
Hollywood Casino at Penn National is just one of many
Penn National Gaming has been forced by Pennsylvania law to divest itself of Pocono Downs and no longer owns any competing in-state properties. But the company long ago began looking beyond state borders to slake its acquisition ambitions.
Penn National Gaming is now the largest operator of racetracks in North America, controlling 11 pari-mutuel operations in nine states, handling more than $2 billion in bets each year.
In 2005 Penn National engineered the purchase of Illinois riverboat casino operator Argosy Gaming Company for $2.2 billion in cash. The company now owns 22 casinos in 15 states, all regional operations like itself.
Penn National is the third largest publicly held gaming company in the United States—without owning a single property in Las Vegas or Atlantic City. An attempt to grow even larger by swallowing the number two company, Harrah’s Entertainment, failed.
All told, Penn National Gaming currently operates some 37,000 slot machines, 850 table games and over 3,000 hotel rooms.
Hollywood Casino at Penn National Race Course doesn’t necessarily excel in any one area, but it does everything fairly well, which is more than enough considering its remote location, and the lack of competition.
Being located in rural Grantsville may seem like a disadvantage at first glance, but it’s actually a boon for Penn National, considering the racino is some 75 miles west of Philadelphia, which allows Penn National to avoid competing with Valley Forge, Sands Bethlehem, Parx, Harrah’s, and SugarHouse for Philadelphia market share.
Hollywood Casino is even further away from Pittsburgh, where Rivers, Meadows, and Lady Luck Nemacolin are situated.
The state’s three other casinos are even further away.
Because of its isolated location, Hollywood Casino has been a solid revenue generator for Pennsylvania gaming.
License allowances and restrictions
As a racino (race course and casino), Penn National holds a Category 1 license in Pennsylvania.
The casino goes above and beyond the racing requirements set forth by the state for Category 1 license holders, as Penn National hosts races 52 weeks a year.
As a Category 1 casino, Penn National is limited to 5,000 slot machines and 250 table games, but like all Category 1 and Category 2 Pennsylvania casinos, it doesn’t come anywhere near those totals.
Slot and table options
Hollywood Casino boasts nearly 2,500 slot machines on its casino floor, to go along with 70 table games, including a 16-table poker room.
This puts them at the low end of Category 1 and 2 casinos in the state, which makes their revenue numbers all the more impressive.
Poker not a high priority so far
When table games were approved in Pennsylvania a dedicated poker room was opened in the back of Hollywood Casino, right by the entrance to the racetrack, and currently sports 16 tables.
In 2012 Penn National kicked off its first Hollywood Poker Open with players competing at its regional casino properties for a chance at the $500,000 championship event in Las Vegas. Ten travel-and-play packages are also up for grabs during tournament play at Hollywood Casino at Penn National.
Hollywood’s racetrack reputation
When Penn National added casino gambling it didn’t forget its roots as a horse track. Fans can still see live racing every week of the year while purses have vaulted from a pre-slots level of $13 million a year to over $36 million in the past decade.
The biggest event on the racing calendar is the $500,000 Penn Mile that is now part of a multi-stakes card on a million-dollar day of purses.
The flusher purses have attracted more of the sport’s stars to Grantville. America’s top trainers stable horses at Penn National Race Course and Hall of Fame jockeys make regular appearances. Even Triple Crown contenders have been known to make their way to the Penn National starting gate.
Penn National and online gambling
Penn National is positioning itself to be a prime player in Pennsylvania’s online gaming industry, if the state passes an online gambling bill in the near future.
It’s unclear which online gaming platform provider Penn National would partner with, but in addition to its attractive casino in Pennsylvania, Penn National could also leverage its numerous casinos and race courses in other states (should those states pass online gambling legislation and sign interstate agreements) as a way to attract iGaming companies.
Penn National currently operates 26 facilities in 18 states.
There are several states where Penn National operates a casino that has, or is exploring, online gaming: The M Resort in Nevada, Plainridge Race Course in Massachusetts, and the company’s three casinos in Illinois.
Hollywood’s online poker potential
Being the nation’s third largest publicly held gaming company, it’s not out of the question that Hollywood could be ready as one of the first license holders for regulated online poker if/when an iGaming bill comes to pass.
However, a lot has to happen before a Hollywood Poker site can come to fruition and not to mention they’d be going up against competition that already has a strong foothold in the US online poker market.
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