States see gambling as answer

Now that Pennsylvania is a done deal, the gaming industry is focused on other expansion opportunities.

While issues are being debated and proposed in several states, new growth doesn't seem imminent.

State elected leaders view gaming taxes as a way of narrowing budget deficits brought on by the recession. Pennsylvania is allowing its slot mahine-only casinos and racetracks to add table games in exchange for licensing fees and a 16 percent tax on gaming revenues.

"Even with the difficult fiscal environment most states find themselves in, we see few new gaming expansion opportunities," said Janney Montgomery Scott gaming analyst Brian McGill.

Ohio is the only state with a gambling ballot question in 2010. Last year, Ohio voters approved four full-scale casinos. In November, the state is seeking permission for racetracks to add 17,500 slot machines.

Otherwise, gaming debates will be handled inside state legislative houses.

McGill predicts Massachusetts could be the only state to legalize casinos this year. Legislative leaders, including Gov. Deval Patrick, are tired of watching potential tax dollars being gambled away in neighboring Connecticut. Lawmakers want gaming but questions surround what form should be allowed.

"We remain cautiously optimistic that gaming can pass," McGill said.

Casinos have also been discussed in Kentucky.

Unlike Massachusetts, there is a split. The governor and House leaders support gaming; Senate leadership is solidly opposed. With a potential $1 billion budget shortfall and neighboring Ohio adding casinos and possibly racetrack slot machines, the matter will resurface.

Illinois gaming authorities are working toward adding 25,000 to 30,000 video gaming machines as part of a $30 billion capital works program. But it may take 12 months to approve the systems and regulatory structure.

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Susquehanna Financial Group gaming analyst Robert LaFleur has noted the first sign of trouble at Aria. MGM Mirage has reduced room prices at CityCenter's flagship between $30 and $90 a night through March.

MGM Mirage executives said the 4,004-room Aria has had strong occupancy.

However, the price reductions noted in Susquehanna's room rate tracker means Aria is no longer priced at a premium to Bellagio on weekends in February.

"Given the high degree of price elasticity of demand in Las Vegas, we aren't that concerned about the city's ability to fill its rooms," LaFleur said. "If there was strong underlying organic demand for rooms at CityCenter, we'd expect to see asking rates moving up, not down."

Howard Stutz's Inside Gaming column appears Sundays. E-mail him at hstutz@reviewjournal.com or call 702-477-3871. He blogs at lvrj.com/blogs/stutz.