AUSTINTOWN - The operator of the racetrack and video lottery casino under construction here will trim by a third the number of video lottery terminal games when it opens next year.
Officials for Penn National Gaming this week said that lower-than-expected revenues at the recently opened Hollywood Casino Columbus and slow ramp-up at the company's Hollywood Casino Toledo has led to the decision to start with a smaller number of video lottery terminals and grow them as demand dictates.
The company's original announcement to install up to 1,500 video lottery terminals at facilities under construction in both Austintown and Dayton now has been reduced to 1,000.
"What we are going to do is just be a little more conservative with the number of slot products we are going to put on the floor and let the market grow into them over the first couple years," company president and chief operating officer Timothy J. Wilmott said during a company conference call to announce second quarter earnings to investors and the media. "We are going to open with approximately 1,000 games."
Wilmott said once revenue hits a pre-specified plan, the number of the video lottery games will be increased.
Despite the dismal results at the Columbus location and slow growth as Toledo heads into its second year, company officials said they remain optimistic about the Austintown location, noting the racino's 190-acre location at the corner of Interstate 80 and state Route 46 is excellent.
Hollywood at Mahoning Valley Race Course has been under construction since May and is expected to open in the second half of 2014. Building foundations are expected to be poured in coming weeks, company spokesman Bob Tenenbaum said this week.
The company, which operates 38 racetracks, casinos or off-track wagering facilities across the United States and Canada, reported a dismal second quarter that ended June 30. While the company reported an increase in revenues for the quarter to $761.4 million from $712.6 million in second quarter of 2012, the company reported a net income loss of $12.2 million.
By comparison, the company had reported a net gain of $66.7 million in second quarter 2012.
Wilmott said the company's facilities have reported a drop in overall attendance and less spending of disposable entertainment dollars. New competition in some of the company's markets have affected the company's bottom line along with construction and renovations coupled by weather that included a tornado in May have disrupted gaming at the company's St. Louis casino.
Based on the first two quarters, the company also readjusted its year-end expectations to $805.1 million in earnings before interest and taxes from its prior expectation of $875.8 million.