A far cry from Foxwoods, but these no-frills casinos pay big
Slot parlors, such as Treasurer Cahill has proposed, have proved a $900m cash bonanza for Pennsylvania
BENSALEM, Pa. - It's a little past 6 o'clock on a vanilla Monday night in March and Philadelphia Park is slammed. There are men in sweat suits, women with cigarettes dangling from their mouths, senior citizens with canes - all hoping the numbers and symbols on the screens in front of them match up just right.
They haven't come for the $3.50 hot dog at Grab-N-Go. They're not here to shop at the only store on the premises, a gift shop selling candy, cigarettes, and hats.
They're here, really, for just one thing: penny slots.
"We're old. We need something to do," shrugged Blanche Riffas, a 65-year-old retired postal worker from Willingboro, N.J., who with her husband was leaving $400 poorer. "This is a hobby for old people."
It is facilities like this one, located just north of Philadelphia at a horse track not unlike Boston's Suffolk Downs, that state Treasurer Timothy P. Cahill and House Speaker Robert A. DeLeo have in mind for Massachusetts. For years, DeLeo has pushed to install slot machines at the state's racetracks, while Cahill put forth a plan last week calling for as many as 9,000 slot machines by auctioning three licenses.
Here at Philadelphia Park, which is 15 miles from downtown, there are no hotels with the requisite terry cloth bathrobes, no celebrity chefs padding through their namesake restaurants, no theaters to view concerts and Broadway plays.
Doesn't matter. The slot parlors in Pennsylvania are doing brisk business using a model that is remarkably uncomplicated: cramming a building full of slot machines, playing loud music over a stereo system, and sending scantily clad waitresses around with drink trays. Last year alone, the slots brought nearly $900 million to state government coffers in a gambling tax, and the facilities have created more than 6,000 permanent jobs.
And while casinos in gambling meccas like Las Vegas have seen a massive decline in the economic downturn, the revenues here have been rapidly growing. They are taking hold after opening just two years ago, overcoming stiff competition from full service casinos over the border in Atlantic City.
"From a revenue standpoint, these casinos are doing very well; month over month they're seeing growth," said Doug Harbach, spokesman for the Pennsylvania Gaming Control Board, the state agency that regulates the industry. "And if you look at the numbers in Atlantic City, they're being impacted greatly because we have casinos here."
In 2004, Pennsylvania lawmakers legalized up to 61,000 slot machines at 14 facilities throughout the commonwealth, which could give Pennsylvania more slot machines than anywhere outside Nevada. Seven have opened so far, and two more are scheduled to open later this year.
Governor Edward G. Rendell was the chief advocate, winning a difficult political fight by arguing that the slots would produce as much as $3 billion in revenue annually to put toward economic development, keeping the ailing horse racing industry afloat, and reducing residents' property taxes.
The slot parlors have to pay little money upfront - only $50 million - but they have to agree to one of the steepest tax rates in the country, 55 percent. Cahill has proposed an opposite approach for Massachusetts, asking for a large amount of money upfront - as much as $1.1 billion apiece - in exchange for an annual tax rate of 27 percent.
A wide variety of gaming interests bid on the Pennsylvania licenses, including tribes like the Connecticut-based Mashantucket Pequots who operate Foxwoods; large Las Vegas-based casino conglomerates like Las Vegas Sands; and smaller gambling companies like
Most of the locations in Pennsylvania have drawn little outcry, in part because most have been located at racetracks, far from neighborhoods and in areas already accustomed to gambling and the traffic.
But the two slot parlors that are slated for Philadelphia, a city that prides itself on being the home of the Liberty Bell and Independence Hall, not slots and video poker, have been mired in controversy.
Foxwoods, which was chosen to build one of two standalone parlors, faced such strident neighborhood opposition for its waterfront location that it has been looking elsewhere, possibly converting two floors of a downtown Burlington Coat Factory. Another building it has been eyeing is just two blocks away from the Liberty Bell.
"This is a predatory business that the state not only legalizes but promotes," said Jethro Heiko, a 36-year-old founder of Casino-Free Philadelphia who lives about 300 yards from where one of the casinos is proposed to be built. "Most cities that host casinos become known only as cities that host casinos."
The 55 percent cut that Pennsylvania gets from the slot revenues essentially makes the state a majority shareholder, and the move has paid dividends.
The seven slot parlors brought in $1.6 billion in gross slot revenue last year, meaning the state made $888.6 million. There have been 6,200 permanent casino positions created so far, along with 17,000 construction jobs to build facilities or retrofit old ones. It typically costs slot parlor owners in the tens of millions or hundreds of millions to erect the parlors - nowhere near the $1 billion Governor Deval Patrick once imagined for full-fledged resort casinos in Massachusetts.
Harrah's Chester Casino and Racetrack, south of Philadelphia and about 10 minutes from the airport, built a $430 million facility that focuses so little on the amenities that its high-end restaurant is closed three nights a week. Even the Temptations Buffet is closed on Monday and Tuesday.
The demographic is a noticeably older one, at least on one recent weekday. At about 4 p.m., a reporter counted 35 walkers, canes, and wheelchairs during a walkthrough of the casino floor, which is about the length of two football fields. There is a gift store that sells an odd assortment of items, including porcelain puppies, Philadelphia Eagles seat cushions, and camcorders.
"I'm retired, and I don't want to sit at home looking at the television set and listening to my wife," Joe Peruto, a 79-year old retired accountant who lives about 15 minutes from the slot parlor, said between puffs of his cigar. "It's just something to do."
Cahill estimates that Massachusetts could reap $244 million in annual slot tax revenues by licensing three slot parlors. The treasurer, who also oversees the Massachusetts State Lottery, has said the state should consider privatizing the lottery, though he doesn't think the introduction of slots would affect lottery gambling much over the long term.
The Pennsylvania Lottery, which started in 1972, has continued to increase statewide but has fallen in most counties where there is a slot parlor, according to a legislative report issued last year.
The slot parlors are not the tourist destinations that casinos in Las Vegas or even Connecticut are. Almost all of the license plates in the parking lots are from Pennsylvania and New Jersey. And while several locations will soon open and others, including Philadelphia Park, are expanding, the clientele is unlikely to change.
"For us it's a day out, a trip," said Jack Fine, a 67-year-old who about once a month drives 90 minutes to Mount Airy Casino Resort in the Pocono Mountains. "You're in a fantasy world; you can get away from your worries, your problems."
"Plus," he added, while playing two slot machines, one with his finger the other with his cane. "There's always the lure that you can win $10,000 on a $2 bet."
Matt Viser can be reached at maviser@globe.com. 