When Hollywood Casino Perryville opened its doors four years ago, local and state officials in Maryland were practically giddy.
The casino was the first to open after Free State voters legalized slot machines in 2008, enticed by the prospect of millions of dollars in gambling tax revenue flowing into government coffers. Lawmakers projected the Art Deco-style casino, located in a largely rural area off Interstate 95 nearly an hour's drive north of Baltimore, would, by fiscal 2013, generate $190 million a year in gross revenue.
What happened instead: Maryland quickly became one of the most concentrated gambling markets in the country, and Hollywood Perryville didn’t live up to the original state hype. Its annual revenue has been closer to $86 million — less than half of what the state predicted — as it tries to compete with two gambling goliaths: Maryland Live and Horseshoe Baltimore.
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Since August, when Horseshoe's $442 million chandelier-filled gambling palace opened near the Inner Harbor, Hollywood's revenues have fallen by about 10 percent, compared with the previous year, state figures show. Horseshoe is expected to draw about 5 million visitors a year — five times as many as Hollywood Perryville.
And yet, at a time when gambling has become more about convenience than cachet, prospects for the Cecil County casino are not as gloomy as those figures suggest. Especially when Hollywood is compared with casinos in Delaware, where the legislature has passed two bailouts, or those in Atlantic City, where four casinos have closed this year and thousands of workers have been laid off.
The Perryville casino still turns a healthy profit. And it has a survival plan that does not involve taking on Horseshoe or Maryland Live, the state's largest casino and its main engine for gambling revenue growth. Perryville, which is about the size of a big box store, will never be the biggest or the glitziest casino, so it is staking its future on a different claim: Being the homiest.
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“It is an entirely different style of business. It is almost a neighborhood bar of a casino,” general manager Matthew Heiskell said. “Everybody knows everybody.”
Heiskell said his casino’s bread and butter are gamblers from Cecil and Harford counties and southern Delaware. Under that locals-first strategy, visitors to Hollywood Perryville are less likely to see ex-Poison frontman Bret Michaels, who appeared at Maryland Live in July, or to spot celebrity chef Guy Fieri, who opened a restaurant inside Horseshoe Baltimore. Instead, they are more likely to catch a local cover band called the Vigilantes or take part in trivia night at the Celebrity Bar & Grill. And that is how many of its customers like it, including more than a few who don’t live nearby.
Eileen Cook, who lives in Essex, in eastern Baltimore County, has been to Horseshoe, and she prefers Hollywood Perryville, where, she says, “everybody is friendly.”
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As she played slots on a recent weekday afternoon, the 64-year-old retired deputy sheriff said she found the bigger casino too crowded and noisy.
“The bands are so loud I can’t hear myself,” she said. “I like excitement, but not that much.”
At the other end of the casino, a 63-year-old auto body repairman from East Baltimore kept his eyes fixed on his slot machine as he explained how he ended up in Perryville that day during his lunch break. Horseshoe “is too wide open,” he said. “This place is like — cozy.”
When Horseshoe opened, all eyes were on Maryland Live to see how much of a hit it would take from its new rival. The Arundel Mills casino has seen its revenue fall some. But that decline is nothing compared to what Hollywood Perryville — and by extension the town of Perryville — has been through over the past four years.
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At first, monthly revenue generated by Perryville’s 1,500 slots soared over $10 million, and it stayed close to that until Maryland Live opened in mid-2012. At one point, Perryville’s revenue dropped by nearly half, compared with the previous year. Then-owner Penn National Gaming asked the state to take away as many as 500 slot machines to save money and to banish unsightly rows of unattended machines. The casino now has 1,158 slots.
Last year, Perryville’s revenue surged once again, with the introduction of 20 table games. The casino’s then-general manager, Steve Lambert, began telling reporters that the casino had “turned a corner.” But its monopoly on table games was short lived. The following month, Maryland Live introduced 122 table games, and Perryville’s table game revenue began to slide.
The casino’s changing fortunes have been a roller coaster ride for the roughly 4,300 denizens of Perryville, an old railroad town that served as an important Union outpost during the Civil War.
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By law, 5.5 percent of the casino’s slot machine revenue goes to the town and Cecil County. The town’s leaders had hoped to use the proceeds — which in fiscal 2013 accounted for about a third of its budget — to build a new town hall and replace the double-wide trailer that houses its police department with a new building.
Those projects may take longer to finish, partly because the casino’s contribution has been less reliable than anticipated.
Despite the turbulence, however, Perryville is still glad to have the money, town administrator Denise Breder said, and the jobs. The casino employs 345 people. The slot machine revenue has helped make up for cuts in state funding; finance repairs to one of its chief landmarks, Rodgers Tavern, where George Washington once slept; complete much-needed shoreline restoration at a community park; and hire two police officers.
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Since Horseshoe’s opening, revenue at Perryville has dropped by 10 to 11 percent for the past two months, a year-to-year comparison of state data shows. Heiskell takes comfort in the fact that the drop has been smaller than expected. A study commissioned by the Maryland Lottery and Gaming Control Agency had projected that, starting next year, Perryville would likely lose 13 percent of its slots revenue and 18 percent of its table games revenue. Revenue from table games, in particular, has held steady.
One reason could be dealers such as Lura Price, who has worked at the casino for three years. Her 20-year-old son works in the kitchen. Price said she sees many of the same faces each week at her table, and many of them know her name without having to glance at her name tag.
The Perryville casino is even friendly to card counters. While bigger casinos routinely eject them, Heiskell said individual gamblers who use their intellect to win are welcome. (Card counting teams are another story — those aren't so welcome, he said.)
Anthony Lucas, an expert in casino management at the University of Nevada, Las Vegas, said that being accommodating is probably the biggest competitive advantage a smaller casino such as Perryville has.
“You’ve got to be sure you know who you are,” Lucas said.
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