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Slots revenue declines for first time in 2011

State slot machine revenue declined in May for the first time this year, officials reported Monday, as another month of gains at the Casino at Ocean Downs was weighed down by a $446,000 drop at the larger Hollywood Casino Perryville.

Officials at the Perryville casino, the first of Maryland's two slots parlors, say they are still figuring out the rhythm of business in the first year.

The 1,500-machine casino, which opened in September and had reported gains each month since December, took in $9.61 million in May, down from $10.05 million in April, the Maryland Lottery reported Monday. The casino averaged $206.59 per machine per day in May, its lowest take since January.

Together, the state's two casinos generated $13.29 million in May, down about 2 percent from April. Contributions to the state Education Trust Fund fell to $6.45 million from $6.58 million the previous month.

Total state revenue, including contributions to education, the horse racing industry and small, minority- and women-owned businesses, fell to $8.91 million from $9.09 million.

State officials, the casino operator and independent analysts said the results were not necessarily cause for concern. They said the state's slots program is still in its infancy, and longer-term trends will be more indicative of how the casinos are faring in an increasingly competitive marketplace.

Maryland Lottery Director Stephen Martino said facilities in nearby states such as New Jersey, where Atlantic City is a popular tourist destination, are ramping up their marketing because of competition from places like Maryland.

"We're not going to live and die by monthly revenue numbers," he said Monday. "We're looking for trends over a long period of time."

Industry analyst Jeffrey Hooke said the decline "could be a one-time aberration."

"It's only 2 to 3 percent," said Hooke, who is based in Bethesda. "What is everyone worried about?"

A spokesman for Hollywood Casino Perryville said the dip there occurred in part because May had one less weekend than April. Marketing director Marc DeLeo said weekend business generates 21/2 times more sales than on weekdays.

DeLeo said the casino also competed for attention with other activities as the weather grew warmer and graduation season began.

"They key is understanding the market here," DeLeo said. "Whether you're a resort destination as opposed to a convenient market, what affects your guests? That's what we're learning right now."

Hooke, the analyst, said the Memorial Day weekend and the Preakness might also have hurt business.

"Slot casinos have ups and downs based on the local population," Hooke said.

The Casino at Ocean Downs took in $3.69 million last month, up from $3.51 million in April, the Maryland Lottery reported.

The casino opened next to the Ocean Downs harness racetrack in January. Revenue there has increased each month and is expected to continue climbing with the start of the summer tourist season.

Voters have approved slots at five locations in the state.

Developer David Cordish is planning to open the first phase of a casino at Arundel Mills mall in June 2012, with the rest of the facility to follow by the end of that year.

The state has been unable to find an acceptable operator to run the slots parlors proposed for Baltimore or Rocky Gap in Western Maryland.

When they are all open, the five casinos are supposed to contribute $600 million annually to the state's treasury.

The two casinos now open have generated $90.4 million in revenue so far. The revenue reflects the money the casinos take in after winners are paid out.

The casinos keep 33 percent, while nearly 50 percent goes to the state Education Trust Fund. The remaining money is split among several entities, including the Maryland Lottery, the horse racing industry, local government and small, minority- and women-owned businesses.

hanah.cho@baltsun.com

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