Hollywood Casino faces different market after 20 years
By bob Okon bokon@stmedianetwork.com June 15, 2012 11:14PM
Wayne Smith, general manager, (left) applauds while speaking to employees during a luncheon celebrating 20 years in business and to recognize around 40 employees who were present those 20 years at Hollywood Casino Thursday, June 14, 2012, in Joliet. | Matthew Grotto~Sun-Times Media
THE MONEY:
HOLLYWOOD JOLIET and EMPRESS
Gambling Revenue
Since 1992: $3.8 billion
1992 (June-December): $78.8 million
1993 (first full year): $173 million
Highest year — 2001: $261 million
Lowest year — 2009*: $120 million
Lowest full year — 1997: $137 million
2011: $146 million
Joliet Gambling Taxes
Since 1992: $237 million
Biggest full year — 2006: $15.4 million
Lowest full year — 2010: $8.4 million
2011: $8.7 million
State Gambling Taxes
Since 1992: $1 billion
*Closed three months after fire.
Article Extras
Updated: July 18, 2012 6:17AM
JOLIET — The sky was the limit when Empress Casino opened June 17, 1992. But what a difference 20 years make.
The current owners of the same casino — now Hollywood Casino Joliet — say business is flat, the state political environment is hostile and the odds are slim that they’ll be investing more money in the place anytime soon.
“The spending per customer is flat,” said Tim Wilmott, president of Penn National Gaming, which owns Hollywood Casino. “We’re not seeing growth in our business.”
It’s the same everywhere, Wilmott said. Since 2008, the casino industry has disproved earlier suspicions that it was recession proof. What’s made matters worse in Illinois, said Wilmott, is that state politicians seem to be constantly finding ways to take a cut of their business to replenish government coffers.
At first, a gamble
How different it was back on a June night 20 years ago when Wilmott was in Joliet working for Harrah’s, which would open a year after the Empress. Back then, it was not clear how successful riverboat gambling would be in the Midwest. It became clear quickly for Wilmott when he visited the Empress when it opened — the first riverboat casino in the Chicago regional market.
The place was packed, he said. What’s more, customers back then had to pay $20 just to get onto the riverboats, and they were willing to pay more.
“I remember some customers buying those cruise tickets and scalping their tickets for $100 to people who would buy them just to get on the boat and gamble,” Wilmott said.
The game was on.
“I went back and called my corporate office at Harrah’s and said, ‘Whatever we have to do and spend to open up quickly, we’re going to make it up.’ ”
Through 2011, Hollywood Joliet and its predecessor Empress casino have generated $3.8 billion in total gambling revenue, $1 billion in state taxes and $237 million in taxes for the city of Joliet.
But none of that was being predicted 20 years ago, said Joliet City Manager Thomas Thanas, who was an attorney for the city back then and doing legal work on the casino projects. No one at City Hall had a 20-year perspective on the casino business back then, Thanas said.
“Our perspective was largely three to four years into the future, thinking if this was really good others would jump on the bandwagon, particularly Chicago, and we would see a change in Joliet gaming,” Thanas said. “We thought there would be more competition if Joliet gaming was really good.”
Local market
Talk of a Chicago casino has been running off and on for 20 years, Thanas noted. Wilmott remembers people telling him that they expected the casino companies to take their boats elsewhere after a few years.
For all the uncertainty that lies ahead with Springfield legislators again trying to add more casinos for the sake of state tax revenues, the casino business in Joliet has probably been much more stable than anyone would have thought back in 1992.
It became so stable that the city of Joliet began plugging casino taxes into its operating revenue, something that city officials stayed away from in the early years. Thanas said he wants to get back to the practice of using casino revenue for one-time capital projects. But Thanas is confident that the casino business is here to stay.
“I think there’s still a great gaming market in Joliet,” he said. “People enjoy gambling. Whether you like it or not, people are risk takers. ... I think we’ll still see casinos in Joliet 20 years from now.”
Stability
Some proof of the stability of the business is on the payroll at Hollywood Joliet.
Last week the casino had a luncheon honoring 44 employees who have been with the company since the Empress opened.
One of those employees, Debra Fallara, said the casino brought stability to her life.
“I was a single mom,” she said. “I was able to raise two kids. I bought a house.”
Not without skills when she came to the Empress, Fallara already worked as an accountant. But the casino did open up new doors to her. She started there in the accounting department, moved over to the casino floor to work as a dealer, and now is a games supervisor. She was recently selected as the Hollywood Joliet Employee of the Year.
Recently divorced when she came to the Empress 20 years ago, Fallara also met her husband Peter at the casino. “It’s been wonderful,” she said.
Both Fallara and Phil Dettmering, another 20-year employee, lived in the Cook County suburbs when they came to work at the Empress. They both now live in Joliet and believe the casinos attracted a lot of people to Joliet for the first time.
“People come from all over,” Dettmering said. “They come looking for fun.”
Business in flux
But the numbers have been falling since hitting record levels in 2007. The recession turned around the casino business for the worse. What made things worse for the Joliet business was the opening of a new casino in Des Plaines. The new Rivers Casino has been doing great since opening nearly a year ago but it’s also been raking in money that used to be spent in Joliet.
Hollywood Joliet can boast the last big property improvement project among the older Illinois casinos when it spent $70 million to rebuild its pavilion after a 2009 fire.
But that’s it for a while. Wilmott said he did not expect any major investment at Hollywood Casino Joliet for at least a few years, given both the economic and political climate. Penn National is opening casinos in new markets in Ohio. But in established markets, Wilmott said, it’s harder to recoup big investments from existing casinos.
It may be a sign that the riverboat gambling business has grown up quite a bit since those heady days of June 1992.
“The market 20 years later is so different, so much more competitive,” Wilmott said. “I think the market could be characterized now as very mature.”
