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Basic consideration ignored, and it's costing Rivers Casino plenty

The Sept. 3 "Policy Brief" from the Allegheny Institute for Public Policy painted a troubling picture for Pittsburgh's new Rivers Casino, which experienced disappointing levels of play during its first weeks of operation.

It is a troubling picture, but not because of the kinds of slot machines at the gaming facility or players' perception of "tight" payouts.

Rivers' troubles go back to the facility's most rudimentary planning exercises. The fact is that the casino was built in the wrong location.

Because of that, it isn't likely to ever experience the much-stronger profitability that would have been possible if planners had from day one acknowledged the financial dangers of putting the casino in a place not easily accessible to older players.

Given the choice of driving a few extra miles to the Meadows Casino near Washington, Pa., or dealing with confusing, congested Pittsburgh city traffic and the perception, right or wrong, that Pittsburgh is dangerous at night, it doesn't take a Ph.D. to guess which casino would be the preference of older players.

Rivers' experience has not followed the pattern of play for other casinos in this state, including the Meadows. As noted in the Allegheny Institute publication, the first three weeks of Rivers' operation produced gross terminal revenues (GTR) far below expectations.

Start-ups at most of Pennsylvania's other casinos produced very strong first and second weeks, then trailed off before picking up again.

Rivers has yet to ignite the optimism that its operators maintained prior to its opening.

The Allegheny Institute rightly points to a "confluence of obstacles" with which the Pittsburgh casino now must cope:

• Entrenched competition.

• A lingering recession.

• Sports events close by.

• A time of year when play normally slows.

• A relatively inaccessible location with challenging access.

But while the policy brief touches on the difficulty of getting there, and later getting out of the city, it fails to touch specifically on the older-player issue. Other Western Pennsylvania casinos and those in Wheeling, W.Va., and near Weirton, W.Va., have large older-player clienteles.

Given its location, the Rivers seems geared more to a younger crowd in tune with the city's night-life culture and sporting events — people unlikely to spend as much time at the casino as many older people who decide to brave the traffic and unimpressive signage directing people to the facility.

With such facts in play, revenue is bound to suffer, and that's part of what the Rivers is experiencing.

For the Rivers' bottom line, it would have been better for the casino to have been built at a location similar to the fringe of the Monroeville area. At Monroeville, for example, the Rivers could have drawn players from a wide area east of Pittsburgh — people who might be turned off by the thought of braving Pittsburgh traffic and a difficult location to access.

"By not being able to open the Rivers Casino until the beginning of August, the owners might have missed out on an opportunity for better earnings," the policy brief says. "What's worse, the best months for casino play are now past for this year. And that means reversing the pattern of weakness experienced during the first three weeks is going to be exceptionally difficult in coming months."

While some of the Rivers' hopes might lie in bus trips to the casino by older players, it's going to take hundreds of buses to achieve what a better location would have accomplished on its own.

Those who opposed Pennsylvania's entry into casino gambling and who recognize the dangers of becoming addicted to such purported entertainment no doubt are smiling about the Rivers' opening weeks' experience — and wish the other casinos had had similar experiences.

As the policy brief notes, casino revenues face an uphill struggle in coming months because of the economy and time of year, but Rivers' struggle will be more formidable than others'.

Rivers' owners and management have much to be worried about — no matter how exciting the array of games the Rivers offers.

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