Pennsylvania's Hollywood Casino blames skill games for slot machine reduction

The Pennsylvania Gaming Control Board (PGCB) has approved Hollywood Casino at Penn National Race Course’s (PNRC) request to remove 169 slot machines, with the casino citing the impact of skill games as a key factor behind the decision.

The reduction lowers the number of slot machines on the casino floor to 1,532, just above the minimum threshold of 1,500 required for Category 1 casinos in Pennsylvania. The move is part of a broader trend in the state, with Rivers Casino Pittsburgh having previously removed 302 slots in April.

Hollywood Casino's management pointed to the rise of skill games in Pennsylvania as a major challenge to their slot machine business. Alex Hvizda, Hollywood's Director of Regional Compliance, emphasized that these unregulated machines have been negatively affecting the casino’s operations.

“We believe, and submit to the Board, that this is directly affecting our business and why we’re here with this reduction today,” Hvizda told the PGCB during a recent meeting, as reported by Play Pennsylvania.

A survey conducted by Hollywood within a 10-mile radius of the casino identified more than 325 skill games spread across 77 locations, with three establishments hosting over 10 of these machines. Skill games, which differ from traditional slot machines by requiring a level of player interaction, have become increasingly popular in the state.

PENN Entertainment CEO Jay Snowden also expressed concerns during the company’s Q2 2024 earnings call, stressing that the company is fighting the expansion of skill games through legal avenues.

“Our industry is very much aligned on fighting against the expansion of skill-based games, not just in Pennsylvania but around the country,” Snowden said.

Despite the reduction, Tony Frabbiele, Vice President and General Manager of Hollywood Casino at PNRC, emphasized the importance of maintaining a positive customer experience. Frabbiele stated that customer comfort and machine occupancy are key factors in generating revenue and enhancing player satisfaction.

"What we find is successful is when customers are comfortable at a game and the game is getting the right amount of occupancy inplay, it’s a better experience for our customers,” Frabbiele explained.

The casino reported that its highest gaming floor occupancy occurs on weekends, peaking at just under 40%, leaving many machines idle for much of the time.

While the removal of machines brings Hollywood PNRC close to the 1,500-slot threshold, Frabbiele reassured the PGCB that the casino does not anticipate falling below the minimum requirement.

“We specifically left our count at 1,532 to address that, so we can stay above the cap,” Frabbiele said. He added that any temporary reduction below 1,500 would be minimal and due to unforeseen circumstances.

PGCB Chair Denise Smyler praised Hollywood Casino for its thorough research into the impact of skill games on its business, commending the casino’s "boots on the ground" approach in gathering data.