- Penn National Gaming CEO says VGTs have ‘decimated’ Illinois casino industry
- Company’s purchase of Illinois slot route operator was purely to protect its casinos
- American Gaming Association CEO urges states to include casinos in liability protection laws
Despite owning a video gaming terminal (VGT) business, the boss of Penn National Gaming has urged state lawmakers searching for revenue to close budget shortfalls to protect brick-and-mortar casinos and be wary of Illinois’ experience with VGTs.
In 2015, Penn National purchased Prairie State Gaming, which at the time operated more than 1,100 terminals at 270 bars and other venues across Illinois.
But CEO Jay Snowden said the move was a “difficult decision… to protect against the onslaught of the industry on our brick-and-mortar (casino) properties.”
“I can tell you first-hand the negative implications of distributed gaming,” Snowden said last week during a webinar hosted by the National Council of Legislators from Gaming States (NCLGS).
Snowden said VGTs are “extremely difficult to properly regulate (and) I think regulators in Illinois would agree with us.”
VGTs also “destroy jobs and deter capital investment,” Snowden added, while providing easy access for problem gamblers and minors.
Snowden said almost 40 percent of Illinois gamblers who have signed up to self-exclude did so due to VGTs.
VGTs began being installed inside Illinois bars and restaurants in 2012, about three years after the Illinois Video Gaming Act was passed. As of July 31, there were 35,680 VGTs at 7,137 locations statewide, according to the Illinois Gaming Board (IGB).
The machines generated $1.68bn in revenue in 2019, some 25 percent more than the $1.35bn earned by Illinois’ 10 land-based casinos.
Snowden told the NCLGS webinar that VGTs also impact lottery revenue and casino employment. He said casino employment in Illinois has dropped by 20 percent since VGTs were introduced and “those jobs were not replaced by the VGT industry.”
The Penn National boss’ comments come as states appear likely to consider a variety of gambling expansion options as they respond to the budgetary impact of the COVID-19 pandemic.
Penn National is also a licensed VGT operator in its home state of Pennsylvania.
But VGTs in Pennsylvania are limited to truck stops meeting certain criteria and casinos are opposed to a bill by Republican state Senate Majority Leader Jake Corman to expand the program to bars and taverns like Illinois.
Penn National is also among Missouri casino operators opposing legislation to authorize video lottery terminals in convenience locations.
Snowden said the industry was “at a crossroads today (with) the coronavirus and some budget issues in states.”
But he described the legalization of VGTs as a regressive solution, or easy fix, for budget problems.
“We have an opportunity to partner … and find new tax generation for the states and local communities that are also supportive of the industry,”
Snowden was joined on the webinar by Republican state Senator Jon Ford of Indiana; Keith Pickard, Republican state Senator from Nevada; and Howard Glazer, global head of government affairs and special initiatives at Scientific Games.
Bill Miller, president and CEO of the American Gaming Association (AGA), also spoke to the webinar audience about the industry’s need to innovate around the use of cashless payments on the casino floor.
According to AGA research, 57 percent of past-year casino-goers say having the option to use a digital or contactless payment option on the casino floor is important to them.
“The availability of digital payments will influence consumer choices and support consumer confidence as they begin to return to casinos,” Miller said.
Snowden agreed, saying it was “crazy” that casinos were the only legitimate industry left still doing 100 percent of business in cash.
Miller also urged state lawmakers to include gaming in any liability protection measures they may consider.
“Gaming companies – like so many others – could face additional financial challenges in the form of a potential wave of COVID-related lawsuits from customers and others alleging the business failed to take adequate steps to protect them from the virus,” the AGA boss said.
Although AGA is continuing to advocate for nationwide liability protections in Congress, Miller noted several states have stepped in to grant them, including Nevada, Arkansas and Louisiana.
“Liability protection is essential to allow our industry to reopen expeditiously once given government clearance, by removing the prospect of lawsuits claiming the industry reopened before it was safe,” Miller said.