Indiana casinos see revenues drop, brace for rivals

Indiana's casinos have seen months of declining revenues and lower attendance because of the sluggish economy and bad weather along with facing the threat of more rivals from neighboring states seeking to peel away gamblers.

Admissions at Indiana's 11 full casinos dropped about 3 percent through the first six months of this year when compared with 2010, according to state gaming commission records. The revenues at those casinos and two central Indiana horse tracks with slot machines dipped to the lowest point in three years, falling more than $22 million from last year to $1.39 billion during the first half of 2011.

Casino executives blame the downturn on the recession leading to fewer players at the slot machines and table games.

"It goes back to the economy. It goes to gas prices, and the use of a person's income," said Jim Brown, president of Hoosier Park Racing and Casino in Anderson and the chairman of the Casino Association of Indiana.

"Customers (who) have less disposable income and more difficulty making ends meet are less likely to visit" the casinos, Brown told The Courier-Journal of Louisville.

One is retiree Ronnie Johnson of New Albany, who said he used to visit French Lick Casino weekly to play the 25-cent slot machines with his wife. Since his retirement as a Pillsbury Co. production worker two years ago, the Johnsons have cut their day trips to the casino to every two weeks or so.

"Being retired, we just can't go as often," Johnson said. "I just spent $50 filling up my gas tank. That's $90 this month."

The Horseshoe casino near the Ohio River community of Elizabeth, about 10 miles west of Louisville, saw the biggest business drops among the six southern Indiana casinos. It was closed for 15 days this spring because of flooding, contributing to a 15-percent decline in attendance and an 8-percent dip in revenues for the first half of 2011.

"We are very encouraged by what we've seen in June and July coming off of the spring floods," said Mike Stratton, Horseshoe's vice president for marketing. "Based on what we as a market and industry have experienced over the last 24 to 36 months, we're pleased to see some stabilization in revenues."

The largest casino in the Ohio River market, Hollywood Casino in Lawrenceburg, spent $336 million on a new boat two years ago and has seen revenues drop slightly during the first half of this year, after a 2.5-percent boost between 2009 and last year. It is the closest of the casinos to Cincinnati, which is expected to get Ohio's first casino in two years.

Northwestern Indiana's largest casino, Horseshoe in Hammond, also has seen a small drop in revenue this year. It and other Lake Michigan casinos are watching developments in Illinois, where Gov. Pat Quinn said last week he still hadn't made up his mind about a plan approved by legislators that would add five new casinos, including one in Chicago, and increase gambling at the state's existing 10 casinos.

Even before the recession, gambling analysts warned that the Indiana General Assembly's approval of slot machines at the horse tracks in Anderson and Shelbyville would intensify competition in an increasingly saturated casino market.

"It really is a mature market now," said Brown, of Hoosier Park.

He said nobody in the industry is taking the new competition on Indiana's borders lightly.

The opening of the planned $400 million Cincinnati casino in two years is expected to hurt business at the three southeastern Indiana casinos — Hollywood in Lawrenceburg, Belterra near Vevay and Grand Victoria in Rising Sun.

Two studies conducted during the past two years have estimated the Ohio casino market could cut revenues at Indiana's casinos 20 percent to 30 percent.

"For the whole Cincinnati market, people will go to the closest casino," said William Thompson, a professor emeritus of public administration at the University of Las Vegas Nevada. "That one (in Ohio) will cut a third or more" from the revenues now divided by the three Indiana riverboats.