Revenue for the Hollywood Casino in Perryville has decreased more than 32 percent from July 2011 to July 2012 and as a result, the casino made a request last week to the Maryland Lottery to return 400 to 500 machines in an effort to reduce costs.
The Maryland Lottery announced Monday that Hollywood Casino generated $6,891,741.48 last month and gross gaming revenue per machine per day was $148.21. The casino operates 1,500 slot machines.
Comparing year-to-year, revenue decreased by $3,302,788.777, or 32.4 percent, from last July to this year.
According to the Maryland Lottery's website, Hollywood Casino has earned $61,286,219.33 so far this year, and $3,370,742.06 has been given in local impact grants, which is 5.5 percent of the total revenue earned.
Between the state's three gambling locations — Perryville, Ocean Downs and the new Maryland Live in Anne Arundel County - the casinos brought in a combined $48,054,954.02 in revenue for July.
Excluding Maryland Live, which opened in June, revenue decreased year-over-year by $2,896,391.94, or 18.64 percent.
Last week, the casino made a request to the Maryland Lottery to return 400 to 500 machines in an effort to reduce costs.
In a letter dated Aug. 3 notifying Sen. Nancy Jacobs, Perryville Mayor Jim Eberhardt and Cecil County Commission President James Mullin of the request, Bill Hayles, Hollywood Casino vice president and general manager, states, "As we testified to the governor's gaming workgroup in June, we built the Perryville casino knowing that competition from the Anne Arundel and Baltimore locations would eventually have an impact on us. We invested based on those estimations and now, with the Anne Arundel location open, have the tangible data from Anne Arundel's true impact to the Perryville location."
March was the casino's peak month for revenues since its opening in September 2010, the letter read. During March, the casino brought in $261 per machine per day.
"We are making this adjustment now in response to the impact of Maryland Live! as well as in anticipation of Baltimore's opening as we expect Baltimore will have an even greater impact on Perryville's revenues than Anne Arundel has thus far," the letter continued. "By reducing our machine count on the gaming floor, we hope to bring the WPU [win per unit] to approximately $207 [per day]. This is still well below our peak [of] $261 [per day] but closer in line to the $250 [per day] rate we strive for in our operations across the country."
In 2008, the state projected Hollywood Casino would average $210 per unit per day with 2,500 machines and generate an annual revenue of $191 million.
"In reality," the letter stated, "we are trending to generate $85 million annually, less than 50 percent off the state's initial gross gaming revenue projections for this facility."
Hayles writes that reducing the number of machines on the floor will also increase appeal. As he explains, "The higher the slot occupancy, the more appealing the facility, which in turn leads to a more positive customer experience." It would also reduce maintenance costs.
The casino operator hopes to have the machines off the floor by the end of the year.
On the phone Monday afternoon, Hayles clarified the casino pays a licensing fee up front to operate the machines and there are different fees for different games.
Because it's not known exactly how many slots could be returned or which games, it is difficult to determine how much money the casino would save, but Hayles said it would be "significant."
If a sixth casino location inPrince George's Countyis approved by the Maryland General assembly in the upcoming second special session of the year and the voters in November, Hayles believes it, too, will hurt Perryville's revenue.
"Customers come up from as far as Virginia to our facility," he said. "It would have an impact."
Hayles isn't sure when there will be news on if the casino's request has been approved because Hollywood Casino is the first to make such a request in the state after the location has opened.
"It's a possibility they can deny it," he said. "We're all diving into unchartered waters here."
Monday, the casino will open a new casual dining restaurant, Celebrity Bar and Grill.
The casino's buffet was refurbished, Hayles said, and will have a new menu, bar and a stage for live entertainment.
"Hopefully it will bring some people back or bring in some people who have never been here," he said.