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Analyst: Northeast US Ready for Gambling Expansion

19 September 2003

LAS VEGAS – As reported by the Press of Atlantic City: "State budget deficits, wagering across state lines, new Indian-casino compacts, and the decline of the horse-racing industry make the Northeast (including the Mid-Atlantic) fertile ground for gaming expansion.

"What's now a $9 billion gaming market in the combined 13-state region could soon generate $16 billion in gambling revenues from nearly 200,000 slot machines at corporate casinos, Indian casinos, racetrack slots and state-operated electronic gaming devices, Innovation Group analyst Steven Rittvo told the Global Gaming Expo on Thursday.

"Gambling expansion of some type is a hot topic in 11 of the states, with Vermont and Virginia out of the loop. Only New York, however, has actually voted to expand gambling and only one of 14 possible casinos or racinos there - an Indian casino in Niagara Falls - has opened in the nearly two years since the legislation passed.

"…If the states' gambling plans that Rittvo classified as probable come to pass, the Northeast/Mid-Atlantic region would approach the saturation point of having one slot machine or one gaming-table seat for every 250 people. The ratio now is 658-to-1 in the Northeast and 333-to-1 in the Mid-Atlantic.

"Pennsylvania could be next to pass a major gambling-expansion bill. Its legislature reconvened this month and, pushed by Gov. Ed Rendell, seems on the verge of legalizing slots at up to eight racetracks - and maybe other sites.

"…The impact of casinos and racinos in New York, Pennsylvania and Maryland on Atlantic City casinos would be significant, experts said.

"…The threat to Atlantic City could depend on other states' tax structures. Scott Cooper, president of Wheeling Island Gaming, said his company's ability to operate three upstate New York racinos is constricted by the effective 78.5 percent tax rate on gross revenue, as well as a five-year sunset provision…"

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