Brian Carr: Casinos mislead the public about slot machine losses

I have spent over twenty years in the casino gambling industry, working for some of the largest casino companies in the world including Las Vegas Sands in five states including Pennsylvania.

When casinos complain about losing slot machine revenue, I can tell you they are misleading the public. Most recently this has been at the center of their misguided attacks on legal skill games. The big casinos like to claim they are losing money, when in fact they are doing better financially than ever before thanks to online gaming.

Let me start with the recent claim by casinos that they are removing slot machines due to unfair outside competition. Slot machine reductions are driven by the casino economy, pure and simple. Having more games on the floor requires capital. For example, penny and nickel machines take up valuable floor space and cost money to maintain. Slot machines also require more employees to serve both guests and machines.

Added to this is the well-known premise of casinos that they rarely operate with a slot occupancy rate higher than 30% to 40% of the available machines at any given time. Reducing slot machines reduces costs and has little to no impact on slot machine revenues.

In my time working in finance roles, I have learned what drives revenue and competitive pressures in the industry and what doesn’t.

Which brings me to my other favorite complaint. In recent years, the American Gaming Association – funded primarily by casinos – and many in the Commonwealth’s casino industry have claimed that games of skill are affecting their overall profits.

Pennsylvania casinos continue to break revenue records month after month. Live for example! Casino Pittsburgh saw a nearly 2% increase in slot revenue from last September to September.

But don’t just take my word for it. In his own reports the Pennsylvania Gaming Control Board (PGCB), the Pennsylvania casino regulator, said casino revenues increased significantly from last year. Combined total revenue from all forms of gaming, along with fantasy contests, in September 2024 was $505,879,339, an increase of 6.17% compared to revenue generated in September 2023.

The PGCB also points out the real reason for the decline in slot revenues at casinos. It says that iGaming revenue for casinos increased by 10.79%. iGaming includes online slots, table games and poker. Revenue from iGaming slots has increased by 15% compared to September last year. Casino gamblers simply choose to participate in different ways for their gambling pleasure. Additionally, casino companies have increased advertising and incentives to encourage casino play online. It’s a good business move because playing at online casinos is easier to access and much cheaper to run.

Looking at iGaming revenue in September, the vast majority came from iSlots.

This isn’t just the picture in Pennsylvania. The rise in iGaming revenue and the decline in casino slot revenue is a trend seen in many states, including those that do not operate skill games.

It’s hard to understand why casinos need to find a scapegoat and complain about perceived competition. In reality, with iGaming as a key element, the sector is doing well and generating tax revenue for the state. This is a good story to tell, and they should focus on that.

Skill games also have a great story. They support the livelihoods of small business owners, veterans organizations, volunteer fire companies and fraternal organizations. Under the proposed regulations in Harrisburg, the games would generate an estimated $250 million in new tax revenue for the state in the first year. Some of that money could be used for public transportation and infrastructure needs across the state.

It’s time for the casino industry to end its misguided – and expensive – war against legal skill games. And most importantly, it must stop misleading the public with false claims.