The Kansas City casino market is hoping for a bigger share of the economic recovery this year after seeing its overall business continue to slip in the second half of 2014.
The area’s four longtime players in Missouri have made improvements in facilities, dining and entertainment offerings, and the market’s relative newcomer, Hollywood at the Kansas Speedway, has continued to increase its revenue and could be adding a hotel this year.
“A lot of economic indicators are positive, showing people’s lives are improving,” said Tom Cook, general manager of Harrah’s in North Kansas City. “We’re off to a good start this year.”
For July through December, the area’s five casinos had total revenue of $357.5 million, down 1.1 percent from the second half of 2013. One big reason the market almost kept up was that business this December was much better than in blizzard-battered December 2013.
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For all of 2014, the market’s total revenue was nearly $719.2 million, down 2.7 percent from its 2013 total and even a bit lower than the market’s best pre-Hollywood years, 2007-2009. (A sixth area slot machine facility, the tribal-run 7th Street Casino in Kansas City, Kan., does not report revenue and did not answer a request for comment on its recent results.)
Hollywood opened in February 2012 and gave the market a big bump, to record annual revenue of $759.1 million. But stagnant wages and other entertainment competition knocked that total down to $739.3 million in 2013 again in 2014.
But in contrast to the worst post-recession times, when casino companies could do little besides retrench and cut costs, the area’s properties have done more recently to spruce up to stay competitive and, they hope, be ready when people really start spending more at the casinos. The area casinos all avoided layoffs again in 2014, too, keeping their employee counts stable.
The market’s growth, or lack of it, is also in line with many others as competition and the number of states with casinos increase. Nevada’s second half revenue, for example, was down 3.5 percent, and New Jersey’s was off 4.5 percent last year.
Here’s a look at how the area’s five casinos fared, and plans for this year.
The Ameristar, by nearly $10 million, remained the area’s revenue leader in the second half of 2014, a position it has held the past 12 years. Its second half revenue of $95.6 million was down 3.9 percent from the second half of 2013, the largest drop for any area casino. For all of 2014, its $193.7 million in revenue was down 5.4 percent.
Rod Centers, who took over as general manager in August, said the Ameristar continues to offer the “freshest and most exciting” slot machines, but also has boosted its customer service and entertainment offerings.
Centers said the percentage of customers in its surveys giving the casino’s staff top ratings had increased by 6 percentage points. And he said Ameristar’s workfore remained steady in 2014, around 1,100 to 1,125.
Ameristar also has a new marketing director, Marc DeLeo, who said his efforts were focusing on “the other great things we have to offer,” in addition to slots and table games. The casino has reopened its Star Pavilion, which was closed for a few years in response to the recession, so the Ameristar again can bring in national entertainment. The Beach Boys and Charlie Daniels are coming in later this month, and the Oak Ridge Boys and Kansas are booked in March.
DeLeo said Ameristar is having a special promotion each weekend, including giving away a Cadillac Escalade the last Saturday in February.
Harrah’s North Kansas City saw its revenue drop just 2.2 percent from the second half of 2013, to $87 million. Its 2014 total of $173.1 million was off 2.5 percent.
Of the Missouri casinos, Harrah’s has had the most success hanging onto its business since the Hollywood opened, and has the most revenue from table games in the market. Harrah’s tries to draw more high-dollar gamblers, including from out of town, as it cross promotes with parent company Caesars Entertainment properties in Las Vegas and elsewhere.
The casino revamped its restaurant offerings last year, and Cook said Harrah’s new 37 Steak restaurant had drawn great ratings on Yelp and Open Table. “We think it’s the best restaurant in the Northland,” he said.
Harrah’s also renovated 200 of its hotel rooms last year, Cook said, and has extended into the first quarter of this year a Caesars-wide program increasing patrons’ credits toward gaining a higher tier in the company’s rewards program.
Harrah’s also kept its Voodoo Lounge concert venue active with regional and national acts and has Gaelic Storm, Dave Mason and Todd Rundgren among its bookings in March and April.
Parent company Caesars has struggled under $25 billion in debt, and its operating subsidiary recently filed for Chapter 11 bankruptcy reorganization. But casino operations have not been affected. Cook said it was “pretty much business as usual,” and his casino was fortunate to have already completed its capital improvements such as the hotel renovation.
Harrah’s also has kept its employee count steady around 900, Cook said, with it dropping just 1 or 2 percent in 2014.
Isle of Capri took in $37.7 million, an increase of 1.6 percent from its 2013 second half — the only Missouri casino to have a second-half bump, thanks mainly to a nearly 16 percent December gain. For the year, its $76.2 million in revenue was down 2.1 percent.
Isle, by far the area’s smallest casino, has kept its market share steady above 10 percent by emphasizing value, including slots that tend to pay out a bit more than the other casinos. It raised its employee count by 30 in 2014, to 396.
Jill Alexander, the senior director of corporate communications for the company, said Isle continued “to focus on the overall entertainment experience,” including live music on Fridays and Saturday. Isle last year added a new director of food and beverage, she said, and will offer more food promotions this year.
The Argosy in Riverside pulled in $68.7 million, down 2.4 percent from the second half of 2013. For the year, its $141.2 million was down 4.6 percent.
The Argosy, closest geographically to the Hollywood, has taken the biggest hit since its opening. But its owner, Penn National, also operates the Hollywood in a partnership with the Kansas Speedway Development Corp.
Aaron Rosenthal, Argosy’s general manager, said the Argosy and the Hollywood benefited from cross promotions, either monthly or quarterly. They share the Marquee Rewards program, so that gamblers’ credits at both casinos count together and can be redeemed at either casino.
“We’re excited about a renewed focus on reinvesting in our customers,” Rosenthal said.
The latest promotion, he said, has let new players — or ones whose accounts had been inactive for 12 months — get credits for up to $500 for their play one month and redeem them the next month.
There are still economic headwinds, Rosenthal said, “but it’s time to drive some more business.”
He also said Argosy’s employee head count had stayed steady around 750, “and we’re hiring.”
“We’ve had job fairs, and we have openings we are looking to fill,” he said.
The Hollywood will celebrate three years in business in February, and its revenue continued to increase in 2014. Its $68.4 million in second half revenue was up 4.9 percent from 2013, and its revenue for the whole year, $134.9 million, was up 2.9 percent.
General manager Bob Sheldon said, “The fourth quarter was pretty strong, with good weather and a good calendar. Gas prices have helped, and consumer confidence is a little better. We’ve seen the benefits of that.”
The casino benefits from being on the second turn of Kansas Speedway and near Sporting Kansas City’s soccer stadium, in the western Wyandotte County growth corridor. The speedway added a third big race weekend last May, the track’s first big night race, and will repeat the event this May.
Part of Hollywood’s growth has come from improving its promotion of race weekends, Sheldon said, and “Sporting’s attendance and variety of games have been strong. We’ve gotten some of the benefit of that” in increased casino traffic.
Sheldon also said employment had been “pretty steady,” and the casino’s head count of 700 was down about 20 from the end of 2013.
The Hollywood also could start construction soon on a 248-room hotel. A hotel was to be built within two years of the casino opening, under its original development agreement with the Unified Government of Kansas City, Kan., and Wyandotte County. That deadline was pushed back, Sheldon said, to consider whether to add an event center to the expansion.
A consultant now has concluded that an event center wouldn’t generate new convention business, so next week plans for just the hotel will go before the Unified Government’s planning commission. The Hollywood’s operators now must break ground by early April or face a penalty, though the government appears willing to give more time if bad weather delays construction.
With good weather to start the year, early indications are that business around the area was good in January. And with new promotions, restaurant offerings and entertainment bookings, casino executives are optimistic about 2015.
“I’m hopeful we’ve settled into the new normal and can get the whole market growing,” Rosenthal of the Argosy said. “We’re doing everything we can to drive more business.”
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Four proposals to open a casino in southeast Kansas were submitted last week to the Kansas Lottery Commission by a Jan. 30 deadline. The Legislature, when it authorized casino gambling, approved four areas, including Wichita, Dodge City and Wyandotte County. The southeast area will be the last to get a casino.
Cherokee County, in the southeast corner of the state, is the site for two of the plans, costing $140 million and $145 million. Baxter Springs is the county’s biggest town. The other two, for $62 million and $84 million, would be built in Crawford County, which includes Pittsburg and is just north of Cherokee County. One of the Crawford County plans would be at the Camptown Greyhound Park near Frontenac, which has been closed for almost two decades.
A seven-member Lottery Gaming Facility Review Board has two months to review the plans and choose a winner. The Kansas Racing & Gaming Commission then will do a background investigation and accept or reject the applicant.