Independent Gaming Research Firm Finds Maryland Slot Prices Consistent with Market Rate

UPDATE: June 17 at 1:30 PM
A second independent report was published today by Stifel Nicolaus validating the slot prices at the current market rate. FULL REPORT.

Cites Confusion over “Artificially Inflated” Costs for Maryland Slot Machines

A Union Gaming Research report released today declares Maryland video lottery terminals (VLT) purchases are consistent with market costs despite confusing reports.  The independent gaming research and consulting firm based in Las Vegas states in its report that the $18,000 to $25,000 cost per machine paid by Maryland is a fair market value.  An excerpt of the report (attached) is as follows:

There seems to be a certain amount of confusion with respect to amounts paid for slot machines by the state of Maryland for Penn’s upcoming Hollywood Perryville…Press reports have suggested that the state has paid in excess of $46,000 per slot, which would suggest gross overpayment and imply potential upside to ASP (average selling price) expectations for gaming equipment manufacturers. This is not the case, however.

Based on our analysis of data Maryland has published regarding their slot machine purchases, they have paid roughly $18,000 to $25,000 per slot, which we would consider market rates and inline with ASP expectations for the major gaming equipment manufacturers. When including long-term maintenance contracts (typically five years) and the expected value of daily-fee and revenue sharing contracts on participation games, the “ASP” appears to have been artificially inflated to a much larger number by the press and an individual claiming to be a gaming analyst.”


“These industry experts have substantiated our numbers and recognize that the price paid by Maryland for VLTs is consistent with industry rates paid by commercial casinos,” said Director Stephen Martino.

Maryland’s gaming law, which was approved by the legislature in 2007, requires the Maryland Lottery to own and/or lease and maintain all of the VLTs at the privately owned casinos in Maryland.  The first facility, Penn National’s Hollywood Casino, is expected to open on September 30th with 1,500 VLTs.

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