Meadows Racetrack & Casino. Washington, Pennsylvania Sean A. Sullivan. October 26, 2015

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1 Meadows Racetrack & Casino Washington, Pennsylvania Sean A. Sullivan October 26, 2015 Good Morning, Chairman Payne, Chairman Kotik, and fellow members of the Gaming Oversight Committee. Thank you for the opportunity to speak to you today about House Bill My name is Sean Sullivan and I am vice president and General Manager of The Meadows Racetrack and Casino. To get started, I would like to quickly familiarize you with The Meadows Racetrack and Casino property, which opened in Property Overview; $700 Million 180-Acre Entertainment Destination $92.7 Million in New Capital Investments ($42.7 Million Meadows/ $50 Million Partners) Over $1.1 Billion Slot Taxes/ Fees and PRDF Purse Contributions Over $40.6 Million Table Taxes / Fees 1,300 Employees - Family Sustaining Jobs Committed to Training and Compulsive & Problem Gaming Over $4.S Million with "Neighborhood Partners" Over $1.7 Million Charitable Contributions Property Amenities: 5 /8 Mile Harness Racetrack Racetrack Improvements ($11 Million) o 800 Stalls - Horses Stabled on Property Hyatt Place Hotel ($25 Million) o 155 Room o Walkway to the Casino 1

2 "The Street at the Meadows" ($25 Million) o 50,000 Square Feet of Retail o 94 Luxury Apartments o Five Restaurants Approximately 3,200 Slot Machines 67 Table Games and 14 Poker Tables High Limit Slots, Adios Lounge and Table Games Outdoor Concerts Venue (3,200 Seats)/ Boxing and MAA (1,500 Seats) Headliners Showroom and Vibe Center Lounge Bowling Center with 24 Lanes Triple Crown Banquet Center (8,000 Square Feet) 3, 900 Parking Spaces (2,500 Covered and 1,400 Surface) Bistecca Steakhouse and Cigar Bar Carvery Restaurant/ Food Court/ Delvin's Snack Bar Due to the intricacies of this subject matter and the fluidity of other gaming related legislative considerations, I have prepared my testimony in an outline format. First, I would like to say that the Meadows is on record in support of slots at airports with the right conditions to be successful. Le&islative Matters Pending: o Online Gaming o Lawrence Downs Racetrack & Casino o Slot Machines at Off Track Betting Parlors o Daily Fantasy Sports Tournaments o Video Gaming Terminals o Category 3 Casinos - Patron of Amenities Fee o Liquor Serving Hours o Online Lottery o Illegal Gaming Devices o Racing SB 352 2

3 Background - Slots at Airports: Las Vegas, McCarran International Airport (Year ending 3/31/15): o Estimate 20 Million Visitors o 1,271 Slot Machines (1.1 % of Clark County Total Machines of 113,412) o Average Win Per Unit Per Day $63.50 (47% of Clark CountyWPUPD of $135) o Win Amount $29 Million (.53% of Clark County Total Revenue of $5.59 Billion) Reno International Airport (Year ending 3/31/15): o Estimated 1.6 Million Visitors o 250 Slot Machines (1.3% of Washoe County Total Machines of 18,027) o Average Win Per Unit Per Day $23.23 (25% of Washoe County WPUPD of $93) o Win Amount $2,119,700 (.35% of Washoe County Total revenue of $611 Million) Slots at Pennsylvania Airports o Fees: Small ($1 Million) Medium ($2.5 Million) Large ($5 Million) o Taxes: 60% Licensed Operator/ 20% General Fund/ 20% Airport o Airport Category: Small Airport: 20,000 Visitors/ SO Units/ Arnold Palmer Medium Airport: 4 Million Visitors/ 500 Units/ Pittsburgh Large: 20 Million Visitors/ 1,000 Units/ Philadelphia o Estimated Win Per Unit: Small Airport Revenue $500,000 ($25 WPUPD / 50 Units/ 365 Days) Medium Airport Revenues $5 Million ($55 WPDPU / 250 Units I 365 Days) 3

4 Large Airport Revenues $42 Million ($115 WPUPD / 1,000 Units/ 365 Days) o Expenses: Mobile Gaming Devices $500 Per I-Pad Mobile Gaming Format - Geo Fencing Third Party Vendor Slot Machines $25,000 Each Machine (all in) Lease Game Consideration ($75 Per Day) Surveillance - $1,000 Per Machine Kiosks - $40,000 Per 125 Machines Count Room - $200,000 Casino Build- $100 Per Square Foot (20 SF Per Unit/ Wiring/ Walls) Labor: $1,500 Annually Per Person (Slots, Security, Surveillance, Count) o Considerations: PGCB Staffing - Currently 24 /7 at Brick & Mortar Casinos Location of Machines Pre TSA or Past TSA Single or Multiple Locations Category 1 & 2 Casinos already paid $50 Million for 5,000 Slots Category 3 Casinos paid $5 Million for 600 Slots Technological Advances Mobile Gaming/ I-Pads Geo Fencing Hours of Operations Responsible Gaming (Minors and Self Excluded) Responsible Liquor Service - Currently State Police Responsibility Smoking vs. Non Smoking 4

5 Meadows Racetrack & Casino {Airport Slots Testimony) Summaa o The Right "bundle" of Gaming Initiatives can be critical to the continued success of Gaming in Pennsylvania; the wrong "bundle" can irreparably harm our industry... o Market Saturation and Maturity must be taken into considered... o Act 71: Rejuvenated PA Horse Racing industry Created jobs - short and long term Provided $2.3B in property tax reduction for PA citizens Provided health and pension benefits Generated economic development Created opportunities for racetracks o Airports Slots are a difficult business model for small & medium locations... o It would be prudent to "test" the concept of slots at Pennsylvania Airports (Customer Survey)... Thank you and I welcome the opportunity for any questions at this time. s