Schadenfreude

On one hand:

"Just when it appeared things could not possibly get any worse for the recession-ravaged casino industry, along came February. Revenue plummeted a breathtaking 19.2 percent -- the biggest monthly drop ever in Atlantic City's 31-year history of legalized gambling -- to offer more evidence that customers have cut back on discretionary spending for casino trips during the economic meltdown. Fierce competition from Pennsylvania's slot parlors added to the misery."

And on the other hand:

"The economic woes dragging down most industries across America have one noisy, colorful, animated exception -- Pennsylvania's slot machines. At a time when other sectors are contracting, the six casinos that have been operating for more than a year showed 14.3 percent growth in February 2009 revenue compared to February 2008, the Pennsylvania Gaming Control Board reported yesterday. The growth occurred despite this year's February having one less day than in the 2008 leap year."

Why is Pennsylvania hammering Atlantic City? Here's one reason -- tax free comps:

"For Pennsylvania's seven slots parlors, giving away tax-free credits -- $21.1 million worth in January alone -- is more than just a marketing tool. Gaming operators here say it has become one of their most powerful weapons for siphoning business away from Atlantic City's casinos. The New Jersey Legislature decided in 2004 to phase out the tax on complimentaries, and it expires June 30, said state Casino Control Commission spokesman Dan Heneghan. The change cannot come soon enough for Atlantic City, as all of Pennsylvania's gambling halls, from Mohegan Sun in Wilkes-Barre to Mount Airy Casino Resort in the Poconos, are ramping up free slot play heavily this year. Look for the Pennsylvania comps to come even more fast and furious after June."

... "An employee of the Meadows Racetrack and Casino was arrested today and charged with stealing $246,301.61 from the facility using fake invoices. Thomas M. Reddy, 47, of Bridgeville, was arraigned today on one count of theft by deception and released on his own recognizance. Mr. Reddy, most recently the director of purchasing and facilities for the Meadows Casino, is accused of issuing fraudulent invoices for two companies, Innovative Cleaning Concepts and Total Mechanical Restoration. An investigation by the Allegheny County District Attorney's office, along with the Meadows and the Pennsylvania Gaming Control Board, showed that the addresses for the companies were fake, and Mr. Reddy had deposited 147 checks into his personal bank account."

... and speaking of The Meadows:

"Billionaire James Packer today scrapped a $1.75 billion takeover of Cannery Casino Resorts LLC and sold his Australian cattle ranches to Guy Hands' U.K. buyout company, Terra Firma Capital Partners Ltd. Packer's Crown Ltd.. Australia's biggest casino owner, rose by a record 13.5 percent in Sydney trading after calling off the deal to buy U.S.-based Cannery, which would have given it three Nevada casinos and the Meadows racetrack near Pittsburgh."

Dispatches from the border

After years of getting denied by voters, casino-backers in Ohio think they've found a solution -- stop asking the voters for approval, and skip around the state constitution while you're at it:

"Even as out-of-state developers pitch a plan for casinos in Ohio's four largest cities, the state's ailing horse tracks are going to the legislature with a proposal for thousands of slot machines at their facilities.  The seven tracks, including Scioto Downs south of Columbus and Beulah Park in Grove City, could get slot machines without going to the public for approval, according to an analysis by a member of the Ohio State Racing Commission ... The General Assembly could authorize a state agency, such as the Ohio Lottery Commission or the racing commission, to administer gambling at the racetracks. There would be no need to go to the voters despite the state constitution's restrictions."

Ohio's governor is reportedly against this plan.

... Forest City Enterprises, after years of trying to land a casino in Pittsburgh, in Ohio and elsewhere, apparently plans to sit this one out:

If 2009 becomes the breakthrough year for casino-style gambling in Ohio, [one] of Northeast Ohio's most stalwart supporters and advocates of gambling won't be at the table. Missing in the recent conversation about bringing slot machines and other games of chance to Ohio is any mention of Forest City Enterprises Inc., the Cleveland-based developer that in the past has been a serious player in efforts to get voters to approve casino gambling.

[For] Forest City, backing away from gambling this time around is a corporate decision. "We spent money on three of these (ballot initiatives in Ohio) and we just lost in Pennsylvania," said David LaRue, president and chief operating officer of Forest City's commercial group. "As a corporation, we've just decided gaming is not anything we want to own and invest in."

Forest City had hoped to put a $500 million slots casino in its Station Square development in Pittsburgh after Pennsylvania approved gambling in 2004. But the state gaming board selected another applicant after a protracted bidding and appeals process. Although it's sitting on the sidelines for the latest push in Ohio by would-be casino operators, Forest City might be willing to be a casino landlord.

Odds and ends

Gov. Rendell tells the Philadelphia casino licensees to start building, or else he may have to do something drastic: "If the legislature came to me with legislation saying, ‘Philadelphia's not cooperating, they're not participating, they're dragging their feet, and we've all done our bit -- the counties and municipalities are all up and running -- why should Philadelphia get any of the tax relief?' I would have to weigh that heavily." ... A $200 million casino is opening in Indiana: "Singer Justin Timberlake and actress Jessica Biel taking part in the ribbon-cutting ceremony." Weren't they just on Saturday Night Live together? ... Kansas is fighting over casinos ... Texas is wrangling over the same ... It's almost spring, meaning it's almost horse-racing season, meaning it's almost time for another round of "Can Horse Racing Survive in [Insert State] Without Slots?" stories. This week, it's New Jersey's turn:

"Gov. Jon S. Corzine has ordered the creation of a commission on the horse racing industry to assess the long-term viability of and recommend possible funding solutions for the financially-troubled sport. The move comes in the wake of a New Jersey Sports and Exposition Authority (NJSEA) budget report that projects shortfalls caused largely by a decline in horse racing revenue at the Meadowlands Racetrack."