The Pennsylvania legislature passed a sweeping gaming reform act last October. One of the state’s two “Resort” casinos, Valley Forge Casino Resort, is already reaping the benefits of the new law. For whatever reason, the other “Resort” casino, Lady Luck Casino Nemacolin, has let the same opportunity pass it by.
The bill was hundreds of pages long and covered a wide variety of topics. Nestled in-between big-ticket items like online gambling, DFS, sports betting, satellite casinos, and VGTs was a provision that would allow the state’s Category 3 “Resort” casinos to eliminate the state-mandated amenity fee requirement for a one-time payment of $1 million.
The genesis of the amenity fee
Pennsylvania’s original casino law created three categories of casinos (the gaming expansion law created a fourth category, satellite casinos). Each has different restrictions and licensing costs:
- Category 1: Racinos
- Category 2: Standalone casinos
- Category 3: Resort casinos
By law, Category 1 and 2 casinos can house up to 5,000 slot machines and 250 table games. Resort casinos are limited to 600 slot machines and 50 table games.
Further, only hotel guests or someone paying the amenity fee could access the gaming floor.
Valley Forge wastes no time paying the $1 million
Valley Forge jumped at the opportunity to rid itself of the amenity fee. Almost before the ink was dry on Gov. Tom Wolf’s signature, the casino cut the state a check for $1 million.
Valley Forge Casino Resort President and CEO Eric Pearson said at the time:
“Since opening five years ago, we have been constrained by the amenities requirements and membership fees which have confused and frustrated our guests. We are thrilled to be able to welcome our guests to our casino in the same manner as the other Pennsylvania casinos. Lifting this special requirement for guests to enter the casino allows us to better serve our existing guests, and puts us in a better position to attract new visitors to our property.”
Pearson was correct.
Valley Forge’s revenue has soared since it made the one-time payment of $1 million.
- November 2017: +12.4 percent
- December 2017: +6.4 percent
- January 2018: +13.9 percent
- February 2018: +15 percent
- March 2018: +10.5 percent
- April 2018: – 5.64 percent
- May 2018: +25.18 percent
- June 2018: +15.84 percent
- July 2018: +7.44 percent
- August 2018: +6.93 percent
Lady Luck chose the status quo
To the surprise of many, the other Category 3 casino, Lady Luck stood pat.
Its monthly revenue has been going in the opposite direction:
- November 2017: +2.01 percent
- December 2017: +11.80 percent
- January 2018: -2.23 percent
- February 2018: -10.05 percent
- March 2018: +2.31 percent
- April 2018: – 11.78 percent
- May 2018: -10.57 percent
- June 2018: -8.02 percent
- July 2018: -8.57 percent
- August 2018: -4.19 percent
Why hasn’t Lady Luck paid?
So what’s holding Lady Luck back?
There are at least two reasons.
First, Lady Luck isn’t exactly a moneymaker.
The small casino is lucky to hit $3 million in gross gaming revenue in a month.
If revenue were to increase by five percent after removing the amenity fee, it would take Lady Luck roughly a year to recoup the one-time payment. And that doesn’t take into consideration the lost revenue from the amenity fees it will no longer collect.
Basically, the casino might not have the money to make such a payment.
Second, Lady Luck is in the midst of a management change.
Included in its deal to purchase Presque Isle Casino, Churchill Downs will take over day-to-day management of Lady Luck from El Dorado Resorts. The deal is expected to close in Q4.
There’s a good chance the $1 million payment to eliminate the amenity fee requirement is paid once CDI officially takes over the casino.
