CHESTER — The new chairman and executive director of the Pennsylvania Gaming Control Board gave their nearly three-year-old industry a clean bill of health during an interview Friday at Harrah’s Chester Casino and Racetrack.
The state’s ninth casino will open in Pittsburgh in August and the first casino in Philadelphia is expected to finally arrive in spring 2010, according to PGCB Chairman Gregory C. Fajt, 54, of Pittsburgh.
Fajt, along with PGCB Executive Director Kevin O’Toole and board Commissioner Gary Sojka, were given a tour of Chester’s casino by Harrah’s General Manager Vince Donlevie Friday morning.
Fajt, a 54-year-old from Pittsburgh, served as Gov. Ed Rendell’s chief of staff for two years before taking control of the state’s gaming board. Fajt said that even in its infancy, the state’s casino industry has greatly benefited Pennsylvanians.
“The gaming industry overall has generated $1.5 billion over the last two years in property taxes,” Fajt said. “It’s generated 8,000 living-wage jobs for Pennsylvanians.
“It’s created another 7,200 jobs in construction for the eight casinos that are up and running right now,” he said. “It’s given millions and millions of dollars to the host communities that have the casinos within their boundaries.”
Regarding the latter, he cited the 200-300 employees at the Chester facility who are city residents and others from surrounding areas.
Fajt said the industry has been a tremendous boon to the horse-racing industry. With the increased purses coming from slot machine revenue, people have come to the state to both breed and race their horses here because the purses are higher, he said.
“So we think that gaming when properly regulated — and we have set that regulatory bar very high in Pennsylvania — we think it’s a win-win-win for our citizens.”
Gov. Rendell signed the bill legalizing casinos in July 2004. The state’s first casino at Mohegan Sun at Pocono Downs in Luzerne County opened Nov. 14, 2006, with harness racing.
Harrah’s Chester Casino has raked in a ton of cash since it opened in January 2007, although in recent months there have been declines in revenue.
For the fourth month in a row, the gross terminal revenue of the waterfront racetrack/casino on the former site of a shipyard is down. In May of this year, it declined 6 percent compared to May 2008, but so did that of two other casinos: Mount Airy Resort & Casino, which saw a 9.7 percent decrease, and Presque Isle Downs & Casino, where revenue was off 4.5 percent.
Revenue at Harrah’s Chester was down 2.47 percent in April compared to the same month last year. In March, Harrah’s took in 7.36 percent less revenue. In February, revenue dropped 1.89 percent.
Even so, slot machines in the state generated $178.4 million in May — a nearly 18 percent increase over revenue generated by gaming in May 2008.
The casino ranked third in gross terminal revenue this fiscal year to date among the eight current casinos with $301.4 million. Philadelphia Park in Bucks County had the most revenue with $335.5 million and The Meadows outside Pittsburgh finished second with $245 million.
The total gross terminal revenue for all casinos for the fiscal year to date is $1.6 billion, according to the latest PGCB figures through June 8.
In wagers received for the fiscal year to date, Philadelphia Park again topped the list with $4.7 billion, followed by Harrah’s Chester, $3.7 billion, and The Meadows, $2.9 billion.
The PGCB chairman said the casinos, like many other segments of the economy, haven’t escaped the effects of the recession.
“As with all businesses, the gaming business is not recession-proof,” Fajt said. “Gaming is entertainment for people and just as restaurant, cars, movie theaters feel the pinch when there’s a recession, so does the gaming industry.”
But the overall picture for Pennsylvania gaming is “a great picture” and revenues are up, he said.
“It’s happening the way we thought it would happen,” Fajt said. “We are taking money away from border states. People aren’t going to Atlantic City — they’re staying in Pennsylvania. They’re not going to New York, they’re staying in (Pennsylvania). They’re not going to West Virginia, they’re staying in western Pennsylvania.
“The governor when he was pitching this bill said there’s no reason for Pennsylvanians to fund education in New Jersey, or roads and bridges in West Virginia,” Fajt said.
“Let’s keep that money home; let’s use the money for property-tax relief — and that’s exactly what’s happening,” he said.
As the economy tightens, people don’t want to travel as far, instead of traveling to Atlantic City, he said.
With the opening last month of the Sands Casino in Bethlehem, Northampton County, and the proposed opening of the Sugar House and Foxwoods casinos in Philadelphia, there would be five casinos in the four-county region. When asked whether this would siphon customers away from Chester or vice-versa at the other locations, Fajt said the market will dictate whether there’s too many casinos in this area.
In these tight credit times, there are people out there lending money to these casinos, Fajt pointed out.
“And they are a lot smarter than you and I on the financial side of things,” he said. “They would not be lending money to build casinos if they didn’t think that there was a longtime prospect for casinos — especially in these tight times when credit is tough to come by.
“So the fact that the credit markets are saying they think that long-term gaming has a future in Pennsylvania, I think bodes well for the state,” Fajt said.
There is the possibility of the addition of table games at casinos in the future, he said.
House Majority Whip Bill DeWeese, D-50, of Greene County, is once again drafting legislation that would allow table games in Pennsylvania casinos. A spokesman for Rendell said the governor currently believes it is too soon to expand gaming beyond the slot machines.
However, Rendell has favored legalizing video poker machines in bars and clubs to fund tuition relief for students at state universities and colleges.
Fajt said there are “serious discussions” in Harrisburg on whether to add table games to Pennsylvania’s casinos.
“I think we’ll know the answer to that, whether that passes or not, before the Legislature breaks for the summer,” he said.
They are in budget negotiations now with a June 30 deadline, which usually extends beyond that, he said.
The Senate wants to pass a reform bill for the state gaming act, but the House on the other hand is pushing table games, said Fajt.
“I think it’s a 50-50 prospect right now,” he said.
The PGCB is “very happy” with where the Harrah’s facility is right now, in view of nearby competition such as Delaware Park, Fajt said.
“They are exceeding the numbers that they based their projections on,” he said. “They are exceeding the numbers that we based their projections on.
“So we think they are doing a great job here and it’s a first-class facility,” Fajt said.
Fajt, who was appointed to a three-year term that expires July 2011, earns a salary of $150,000 a year. Kevin O’Toole, of Harrisburg, oversees an agency of 275 employees and earns $180,000.
