GM: Casino drew 3.4 million visitors in first year

Remarking that “success in any business is measured one guest at a time,” Hollywood Casino Toledo General Manager Richard St. Jean has 3.4 million reasons to feel the casino’s first year of operation has been a success.

The casino drew more than 20,000 guests on its opening day, May 29, 2012, and went on to log more than 3.4 million visitors during its first year — 600,000 more than projected, he said. Seventy-four percent of visitors came from outside Lucas County and 44 percent came from outside Ohio, including 31 percent from Michigan. The casino paid out $41.5 million in jackpots.

On May 29, as hundreds of slot machines dinged and chimed in the background, St. Jean joined local officials and business partners on the H Lounge stage to mark the casino’s anniversary.

“I stood here a year ago very, very proud of the property we were ready to launch and here it is one year later and I can tell you that pride hasn’t changed or diminished one bit; in fact, it’s actually grown,” St. Jean said.

During its first year, the casino served 36,000 gallons of draft beer, Final Cut Steak & Seafood served 23,000 pounds of prime beef and visitors used 1,662 miles of toilet paper, said Hollywood Casino Toledo Vice President of Marketing Jason Birney.

In February, Final Cut earned a four-star rating from Forbes — the only restaurant in Ohio, Michigan or Indiana to receive the distinction.

“We’ve been a great neighbor to Rossford and a great business neighbor to Toledo,” St. Jean said. “We feel we have been accepted as a fun hotspot that complements the other entertainment facilities in town.”

St. Jean said he and parent company Penn National Gaming are pleased with Hollywood Casino Toledo’s first-year results.

“Our patterns, inception to date, have been very, very close to what we’ve predicted month by month,” St. Jean told Toledo Free Press. “We can’t control how we perform relative to someone else’s numbers. Too many people compare a state number pulled out of a budget that said, ‘This is what we really need to hit,’ whether its current or whether it was back in 2009 when the referendum passed. Well, there are a lot of mitigating factors with the economy and everything else, so we do our own forecasts and we measure our success against that forecast and we were pleased with our performance against our forecast.”

Horseshoe Casino Cleveland opened May 14, 2012, followed two weeks later by Hollywood Casino Toledo. Hollywood Casino Columbus opened in October followed by Horseshoe Casino Cincinnati in March.

From their openings through April, Ohio’s four casinos brought in $615.7 million in adjusted gross revenue, with $181.2 million coming from Hollywood Casino Toledo.

St. Jean said he was particularly pleased to see Toledo notch the highest net slot win among the state’s four casinos in April, a result he attributed to Cleveland’s casino being “cannibalized to a degree” by nearby Thistledown Racino.

Toledo’s biggest revenue month to date was June 2012, the casino’s first full month of operation, when it brought in $20.4 million.

Revenue then dropped to $19.1 million in July, $17.4 million in August, $15.9 million in September, $14.8 million in October and $13.6 million in November before bumping up to $14.2 million in December, $14.3 million in January, $14.8 million in February and $17.8 million in March and then dipping to $16.4 million in April.

Economic growth

Toledo Mayor Mike Bell said May 29 that, while the casino was a controversial subject, to him the issue was simple: The casino would create jobs and help turn the city’s economy around.

“When we started our administration the unemployment here in Toledo was about 13.8 percent; that’s down to somewhere about 8 percent now,” Bell said. “The casino has played a role in that. It’s employed people who were not employed before and they now have a job. They are able to do the things they want to do for their families and that increases the quality of life for all Toledoans.

“If all 1-year-olds could do what [the casino has] been able to do in one year, we’d really be moving forward as a city and as a world,” Bell said.

New opportunities

About 90 percent of the casino’s 1,300 team members were local hires and 80 percent of the original hires are still with the casino, St. Jean said. So far, 128 people have been promoted, including 13 twice and six three times or more.

One local hire was 41-year-old Stacy Alani of Toledo. Two years ago, Alani didn’t know a thing about cards. Now it’s her livelihood.

After the transportation company she’d worked at for four years consolidated most of its Toledo area operation to an out-of-state office, Alani found herself out of a job.

After several frustrating months of applying for jobs but getting no response, Alani landed a job as a table games dealer — earning more money than before and enjoying the work more.

“Everything happens for a reason. I firmly believe that,” Alani said. “I love the people I work for. Compared to the job I had, which just wasn’t a friendly environment, at Hollywood [General Manager] Richard St. Jean and [Assistant General Manager] Mike Galle will sit down in our lunchroom, just plop their tray down beside us. They are not above anyone. They know everyone by name. They want you to succeed and be happy and you want to do well for them. Everybody is just like a big family there.”

Alani deals mainly craps, but also works at the roulette and blackjack tables. She and the other dealers know regular customers by name. She went through weeks of dealer training, but said her education continues daily.

“This is my new career. This is what I’m doing and I want to know everything about it,” Alani said. “I just try to take it all in and learn everything I can. I learn so many new things every day.”

Business impact

Construction workers provided an initial increase in revenue for Rossford businesses and casino employees continue to bring in a minimal level of business, employees at several Rossford businesses said.

“We get business from the employees of the casino, but not their customers,” said Amanda Schoenhofer, an employee of Marco’s Pizza in Rossford. “I don’t think a lot of the people leaving the casino come into Rossford. They just go straight to the highway.”

Rossford City Councilman Chuck Duricek, who owns Duricek’s Automotive Services about a mile from the casino, said businesses in Rossford have experienced little to no increase in customers. The best part, though, is that the predicted increases in crime have not been an issue at all, Duricek said.

Nearby hotels, however, are an exception. According to Front Desk Manager Cal Disouky, the Days Inn in Toledo, located across the street from the casino, has experienced a 15 to 20 percent increase in occupancy because of the casino.

“We’re the only hotel within walking distance,”  Disouky said. “We expected more, but it didn’t turn out how we expected in part because we’re not on the casino’s list of approved hotels.”

Other hotels have experienced a bump in business.

“We’ve picked up quite a bit of business,” said Connie Adams, front office supervisor at Country Inn & Suites in Rossford, which is on the casino’s recommended  list. “We probably have six to 10 people per day from the casino.”

Local focus

The casino often touts a commitment to supporting local businesses, especially woman- and minority-owned businesses.

Kurt Amstutz, co-owner of Elmore-based Tank’s Meats, which supplies 50 percent of the meat sold at the casino, said May 29 he was thankful for the opportunity to partner with the casino.

“For a company this size to give a small player like us the opportunity, the chance of doing business with them, is phenomenal,” Amstutz said.

Shelly Okun, owner of Toledo-based Sam Okun Produce, called the partnership a once-in-a-lifetime opportunity.

“It’s been really empowering to us as a company and for our customers,” Okun said.

Tourism

Richard Nachazel, president of Destination Toledo Convention and Visitors Bureau, said the casino has helped attract conventions and events to Toledo.

“There’s probably been 15-20 groups that have booked the Toledo area not specifically because the casino was there, but the casino being there was a help,” Nachazel said.

One example is the Heartland Travel Showcase, which hosted its annual convention in Toledo in February for the first time in 25 years and will return in March 2014.

“One of the things that helped them decide on us versus other cities was the fact we do have a casino,” Nachazel said. “It’s been incredible for the area, in a word. They’ve been a great stakeholder in the economic tourism impact of Northwest Ohio and certainly work well with our office. We couldn’t be happier they are there.”

Crime

By the six-month mark of the casino’s opening, concerns about increased crime, traffic jams and gambling addictions had largely subsided, area law enforcement said.

Capt. Brad Weis, commander of the Toledo Police Department’s strategic response bureau, said the casino has not been the problem area that many people expected — especially after it started hiring off-duty police officers to work inside.

“It’s definitely less than we expected,” Weis said. “Crime is actually minimal at best. From my perspective, it’s a benefit to the community and it hasn’t been a police issue at all other than traffic backups now and then.”

Rossford Mayor Neil A. MacKinnon III said the casino has actually made Rossford safer than before, thanks to a $200,000 public safety grant from Penn National used to purchase new radios and automated CPR machines, and a $12,000 grant to help establish a K-9 unit.

“We’ve seen no increase in crime whatsoever,” MacKinnon said. “We are actually safer today as a community than before they got here.”

Rossford Police Chief Glenn Goss Sr. agreed.

“It’s been real quiet,” Goss said. “We haven’t had any major changes in criminal activity since the casino’s been there.”

Goss reported more operating a vehicle while impaired (OVI) stops during the past year, but attributed the increase to his increased focus on all traffic law enforcement since taking over as chief in December 2011 rather than a direct result of casino traffic.

Last summer, Rossford police noticed an increase in burglaries, but that also was seemingly unrelated to the casino, Goss said.

Community involvement

Penn National prides itself on community involvement and has given more than $270,000 to local organizations in the past year, plus thousands more prior to opening, St. Jean said. Management team members sit on a dozen local boards and are active participants in the Toledo Regional Chamber of Commerce and Rossford Business Association.

The casino recently partnered with ProMedica on a food reclamation program, in which ProMedica collects unused food and donates it to local social service agencies. Since late February, more than 13,000 pounds of food have been collected, said Stephanie Cihon, corporate director of community relations for ProMedica, who is now working to expand the program into other area businesses.

Tax revenue distribution

Each casino pays a fixed tax of 33 percent of gross casino revenue. Fifty-one percent of the revenue is distributed among Ohio’s 88 counties in proportion to population; half of each county’s distribution will go to its largest city if that city’s population is above 80,000. Thirty-four percent of the revenue is distributed among all public school districts, 5 percent among  host cities, 3 percent to Ohio Casino Control Commission, 3 percent to the Ohio State Racing Commission fund, 2 percent to a state law enforcement training fund and 2 percent to a state problem gambling and addictions fund.

The City of Toledo received $2.9 million in 2012 and about $1.4 million so far this year in tax revenue distributions. Lucas County received more than $575,300 in 2012 and $1.1 million so far this year. Lucas County school districts have received $1.3 million, including $462,575 for Toledo Public Schools.

2012 distributions fell short of the city’s projected $3.4 million, but Lucas County got more than its projected $545,000, said Lucas County Commissioner Carol Contrada.

“We projected conservatively but realistically and the casino outdid itself,” Contrada said. “For 2013, we are on pace to exceed again. In fact, if the casino revenue keeps up the pace that it has been, we’re doubling down in Lucas County.”

The city’s 2013 budget projects $4.95 million in casino revenue, according to public information officer Jen Sorgenfrei.

Rossford City Council member Robert Ruse said he wished the legislation would have allowed for Rossford and Rossford Schools to benefit more from the casino. Rossford Schools has received $38,390 from casino tax revenue distributions.

Detroit impact

Ohio’s casinos have impacted Detroit’s casino business by about 4 percent, said Jake Miklojcik, president of Michigan Consultants, a Lansing-based firm providing economic and policy analysis for the casino and gaming market.

“Stories with the ‘lower than expectations’ headlines for Ohio casinos are intriguing because the totals are just about exactly what I thought they might be and told clients,” Miklojcik said in an email. “I was quoted several places in putting the likely impacts on Detroit at between 2.5 percent and 5 percent, with 4 percent my best estimate. If you look at Detroit figures, and factor in that there was a clear trend upward of 2 percent before the opening, and now down about 2 percent to 2.5 percent with the openings and, in addition, a racino, the net of about 4 percent from the Ohio casinos is pretty much right on.”

Yvette Monet, a spokesman for MGM Resorts International, the parent company of MGM Grand Detroit, said the company “enjoys hearty competition in all of the jurisdictions in which we operate.”

“Though we have seen some recent impact on revenues, there are a variety of factors, including the poor economy, that have impacted revenues in regional gaming markets throughout the county,” Monet said in an email.

MotorCity Casino and Greektown representatives did not return requests for comment.

Looking ahead

Casino employees recently decided to unionize, with negotiations expected to begin in June, St. Jean said.

The biggest challenge for Hollywood Casino Toledo going forward will be continuing to attract new visitors, St. Jean said. Food specials and entertainment such as the outdoor summer concert series that recently kicked off are among ways the casino is trying to draw more people in.

“It was a little lighter attendance than I was expecting, probably compounded by the holiday weekend and cold weather and it being the first concert people didn’t really know what to expect,” St. Jean said of The Temptations and The Spinners concert on May 24. “We expect Air Supply and LeAnn Rimes to be at capacity.”

Year one has been exciting, but St. Jean said he won’t spend too long celebrating the milestone before turning back to the work ahead.

“We’re excited about our performance in year one, but it’s like anything else, we’re now in a new year and it starts all over again. We’re interested in seeing where the business volumes level out. I don’t think we’ve necessarily seen that yet,” St. Jean said.

“We’re always raising the bar, so whether its financial performance, team member engagement or guest satisfaction, we’ve set all new benchmarks based on 2012 which became our baseline. So although we fared well compared to Penn National metrics, we challenge ourselves to do even better [next year].”

By Sarah Ottney TOLEDO FREE PRESS MANAGING EDITOR sottney@toledofreepress.com

Toledo Free Press Staff Writer Casey Harper contributed to this report.