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Horseshoe Casino Opening
(The Daily Record/Maximilian Franz)

Horseshoe revenue 20 percent below projections

ANNAPOLIS — State gaming officials and some legislators say they are not concerned about the financial performance of Horseshoe Casino despite a report that shows the operation is nearly 20 percent below projections.

The Baltimore-based casino, which opened in August, has failed to meet expected revenue projections or to significantly cannibalize the business of its closest competitor — Maryland Live Casino in Hanover.

Stephen L. Martino, director of the Maryland Lottery and Gaming Control Agency, said there is little immediate concern about the performance of Horseshoe Casino given that overall casino revenue is exceeding expectations by 1.6 percent.

“Long term, we hope there are things in place that will help them with marketing,” Martino said. “Maybe they can aggressively tap into the Caesars rewards program that will allow them to attract people here.”

Martino compared Baltimore’s Horseshoe Casino with Horseshoe venues in Cleveland and Cincinnati, which have also had problems meeting revenue expectations.

“There’s some education about the particular challenges that operating an urban casino presents,” Martino said.

“It’s the ability to attract people from the suburbs, who have more disposable entertainment income than the people who live in the city, to come down there,” Martino said, adding that it was also about changing habits of gamblers who have made a habit of going to Maryland Live, which is just 15 miles outside of Baltimore and “a general reluctance from people to go into the city.”

Last year, casino revenue topped $833 million. Of that, slightly less than 4 percent goes to a fund earmarked for local impact grants to jurisdictions that have gaming facilities.

The slower-than-projected start of Horseshoe has caused the city to adjust expectations regarding how much money it will see from those grants. In November, city officials said the casino was only generating $733,000 per month for the grant fund — which would fall short of the $10 million the city hoped to receive in the casino’s first eight months.

A spokesman for the casino said officials for the Baltimore facility were not immediately available for comment.

A consultant’s report in 2013 projected that Horseshoe Casino would generate about $119.7 million from the time it opened until the end of December. The casino reported actual revenue just short of $97 million.

By comparison, Maryland Live posted nearly $315.4 million in revenue, exceeding its projected revenue of $283.5 million.

“This is just a process they’re going to have to go through to attract customers,” Martino said. “I think it’s a lot of small things, not the least of which is they’ve got very aggressive competition 15 miles down the road that had a two-year head start on them and (Horseshoe is) going to have to be very aggressive about clawing some of those customers back.”

Martino said the belief was that Horseshoe Casino would take away some of the business of its nearby competitor.

“It’s not like Maryland Live is sitting there taking it,” Martino said. “They’re doing what they can to keep that from happening.”

Overall, casino revenue in Maryland in January was nearly $85 million — an increase of more than $18.7 million or 28.3 percent compared to the same time in 2014. This was the sixth straight month that casinos reported more than $80 million in revenue.

Excluding Horseshoe Casino, which opened the last week of August, casino revenue decreased by 6.7 percent or more than $4.4 million.

Maryland Live continues to lead the pack with nearly $49.5 million — an 8 percent decrease compared to January 2014.

Horseshoe Casino reported more than $23.1 million, a figure that has remained essentially flat over the last three months.

Hollywood Casino in Perryville generated about $6 million or a 4.9 percent decrease compared to the same month a year ago.

The Casino at Ocean Downs reported revenue of nearly $3.4 million — an increase of 6.6 percent compared to January 2014.

Rocky Gap generated slightly less than $3 million or a 1.8 percent decrease over January 2014.