Looking at a consultant's map, it's easy to understand why Altoona was considered a top pick for a casino.
Because the city is far enough away from other casinos, it is a largely untapped market, which also means a facility here isn't likely to siphon off significant revenue from the established sites.
All things being equal, a casino in Altoona would seem to make sense. But everything isn't equal.
Undoubtedly, there would be central Pennsylvania residents who would like to have ready access to a casino without having to drive a couple of hours.
But if a casino in Altoona would be such a sure shot, why haven't developers already targeted our fair city?
We suspect the reason is there just isn't the population base and the wealth to support such an operation here.
It takes big bucks to open a casino. The license for a large casino in Pennsylvania is a cool $50 million. And that's before you pay for the slot machines, facility, gambling tables, supplies and surveillance equipment, etc., to even open the doors.
And once customers start coming, the operator has to pay a small army of employees to run the games and provide services, such as food and drinks, for gamblers. There are also costs for security and marketing.
It takes a lot of cash flow to keep such an operation afloat because the house only gets a small slice of what's gambled. For example, a casino typically may gross $10 or less for every $100 to put in slot machines (and that's before taxes and expenses). The rest is paid out in winnings to keep gamblers coming back.
Volume is key to making such an operation profitable. That means having a large population base or enough transient traffic to keep those slot machines and roulette wheels spinning.
We question whether Altoona fits those criteria, especially as more and more nearby states open venues giving gamblers more options. Interstate 99 will help tap into the Bedford and State College markets, but even that is likely not enough to get the return investors want.
Perhaps we're underestimating the region. Maybe there's a developer who can make the numbers work.
But from what we see now - and leaving any moral questions aside - what makes sense on a map just doesn't make cents - or dollars - from an investor's standpoint.
