As bidders for the Pittsburgh slot machine licence commit to contributing towards a new arena for the Penguins, some analysts are weighing up the numbers and coming to the conclusion that slot machine revenue may not be enough to support the economic benefits being offered by the licence applicants. It will certainly be a monopoly operation in Pittsburgh, there is only one licence available, and up to 5,000 slot machines will ultimately be in play, but the city is relatively isolated and neighbouring states may soon be competing for clients.

Isle of Capri promised millions of dollars (US$290 million), should it be awarded the Pittsburgh licence, towards a new arena that would allow the Penguins to compete financially in the National Hockey League (NHL). Two other bidders, Station Square Gaming and PITG gaming, have now made similar pledges. The bidders anticipate that slot machine revenue will reach over US$500 million within five years; too optimistic according to some gaming experts who point out that promises of hundreds of dollars of investment in non-casino developments may be unviable without slot machine parlours becoming fully fledged casinos with gaming tables.

The four competitors in the race to build and operate Pittsburgh’s only slot machine venue may be relying heavily on its monopoly status. Pittsburgh, the 8th largest city in the United States in 1910, is now ranked 56th. However, in terms of population it is probably in the top 20. Philadelphia, the largest city on America’s East Coast and ranking 5th in the nation, will have two licensed gaming operations and must also compete with two nearby racino operating licences. Pennsylvania is regarded as one of the very few areas available for gaming expansion within the United States so, whichever way the figures add up, the 14 available licences will be hotly contested. (E-07.14.06)

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