RubinBrown Gaming Stats 2012

National Revenue Analysis

2011 Revenue Growth The U.S. gaming industry saw marginal growth in commercial gaming in 2011, increasing by $773 million, or 2.4%. While the industry experienced increased revenues, the results varied dramatically by region. On the East coast, Pennsylvania continues to exhibit strong growth. In November 2011, Pennsylvania surpassed New Jersey in monthly revenues and became the second largest U.S. commercial gaming state, generating $245.9 million as compared to the $245.1 million generated in New Jersey. This marked the first month in U.S. commercial gaming history where New Jersey was not in the top two states for monthly revenues. In December, the margin between Pennsylvania and New Jersey continued to widen, as Pennsylvania generated $254.9 million as compared to the $246.5 million generated in New Jersey. While Pennsylvania has experienced rapid growth since legalizing commercial gaming, its claim of becoming the second largest U.S. commercial gaming market was aided by its proximity to large metropolitan areas which has effectively siphoned millions of dollars in revenue from the once favored New Jersey casinos. With the continued decline in New Jersey gaming revenues and increased competition in surrounding states, the New Jersey legislature began laying the groundwork to expand gaming outside of Atlantic City in an effort to reclaim the revenues from the Philadelphia and New York City markets. The traditional riverboat facilities located along the Mississippi, Missouri, and Ohio rivers all experienced a treacherous 2011. In late

April and early May, continuous rainfall along the Ohio River Valley resulted in flooding along the lower Ohio and Mississippi rivers. In June and July, the snow melt and additional rains in the upper Missouri River Valley resulted in record flooding. The flooding in both of these regions resulted in many areas being declared federal disasters. Additionally, the flooding led to the closure of numerous casinos which translated into lost gaming tax revenue for state coffers and strained the bottom line of gaming operators. The states that posted the strongest gains in 2011 benefitted from expanded gaming. Most notably, Illinois posted revenue growth of 7.8%, its first increase in revenues since 2006. The increase is largely the result of the re-issuance of the 10th gaming license to the newly constructed Rivers Casino located near the Chicago O’Hare airport. In the first six months of 2011, Illinois experienced revenue declines of 3.1% year over year. Subsequent to the opening of Rivers Casino on July 15, 2011, Illinois experienced a 19.4%, year over year, revenue increase during the last six months of 2011. 2012 Industry Forecast In 2012, the overall gaming industry will see relatively strong growth as the expansion of gaming continues to spread across the nation and consumer confidence continues to grow. Even though the overall industry is expected to experience relatively strong growth, pre-existing facilities will face continued increased competition which will limit their ability to translate industry growth into growth of their bottom line.

Percentage of Commercial Gaming Revenues by State

Commercial Gaming Revenues by State (Thousands) 1

Casinos

2010

2011

% Change

IL 4.5%

IN 8.3%

CO 2.3%

Colorado

40

$759,610

$751,423

-1.1%

WV 3.0%

IA 4.4%

Illinois

10

$1,370,946

$1,477,601

7.8%

Indiana 2

13

$2,794,208

$2,697,070

-3.5%

KS, MD & SD <1%

PA 9.3%

Iowa 2

18

$1,368,074

$1,423,998

4.1%

LA 7.3%

Kansas 3

2

$37,788

$46,061

21.9%

Louisiana 2

18

$2,371,252

$2,374,244

0.1%

Maryland 4

2

$27,596

$155,709

464.2%

MI 4.4%

NJ 10.2%

Michigan

3

$1,377,929

$1,424,445

3.4%

Mississippi

30

$2,388,997

$2,237,074

-6.4%

MS 6.9%

Missouri

12

$1,787,915

$1,805,323

1.0%

Nevada

334

$10,404,731

$10,700,994

2.8%

New Jersey

11

$3,564,330

$3,317,721

-6.9%

MO 5.6%

Pennsylvania 2

10

$2,486,408

$3,025,049

21.7%

South Dakota

140

$106,187

$100,898

-5.0%

West Virginia 2

5

$887,650

$958,696

9.2%

NV 32.9%

Total

648

$31,723,621 $32,496,306

2.4%

1 Commercial gaming revenues are defined as revenues from casinos located in states that offered stand-alone casino facilities, meaning states that exclusively offer gaming through pari-mutuel (racino) facilities (e.g. Deleware and New York) have been excluded from this analysis. 2 The figures for Indiana, Iowa, Louisiana, Pennsylvania, and West Virginia include revenues from the casinos offering EGDs and/or Table Games. Note, the revenue generated from pari-mutuel wagering has been excluded from this analysis.

3 The second commercial Kansas casino opened on December 26, 2011, The Kansas Star Casino. The Boot Hill Casino, which operated for all 2010 and 2011 saw a 6% increase in revenues for 2011. The Kansas Star Casino generated $6 million in the last six days of 2011. 4 The first commercial Maryland casino, Hollywood Casino Perryville, opened on September 27, 2010. On January 4, 2011, Casino at Ocean Downs opened, becoming the state’s second commercial casino.

3 RubinBrown - Commercial & Tribal Gaming Stats 2012