HARRISBURG -- When Pennsylvania officials legalized slots parlors in mid-2004, some skeptics wondered how Keystone State casinos could ever compete with glitzier, better-known gambling meccas such as Las Vegas and Atlantic City.

Well, perhaps such worry was for nothing. Turns out -- at least for now -- Pennsylvania's young casinos are competing quite well against the big boys.

Comparing "gross terminal revenues" in October with those from October 2007, Pennsylvania casinos are slightly ahead, about 3 percent. That may not sound like much, but it's a lot better than sharp declines in revenue in New Jersey and Nevada, gaming officials say.

That 3 percent gain is based on the performance of just the five Pennsylvania casinos that were in existence in October 2007, including The Meadows in Washington County. When revenues from two additional casinos that opened later are added in, Pennsylvania casinos show a 30 percent gain in October over the corresponding month in 2007.

The New Jersey Casino Control Commission recently said that Atlantic City casinos suffered a nearly 10 percent decrease in revenue in October, compared to a year earlier. The decline in slots revenue was even worse, nearly 13 percent, while table games revenue was down by only 3 percent.

For the first 10 months of 2008, casino revenue in Atlantic City was down 6.6 percent over the same period in 2007. Slot machine revenue again was even lower, down 8.6 percent over 2007, while table games were down only 2 percent.

Pennsylvania casinos don't have table games, but there are some legislators who would like to add them.

Things aren't any better in Nevada.

"Casinos on the Las Vegas Strip are showing their worst revenue numbers in years," CasinoGamblingWeb.com reported Oct. 28.

"The [U.S.] casino industry in general has never felt this type of crunch," it reported. In previous economic downturns, "The casino industry has had a knack of surviving and even prospering. That is not the case this time around."

Pennsylvania officials have never really touted their casinos as "destination" facilities, ones that would attract high-rolling tourists and bettors who often travel across the country, the kind the Las Vegas and Atlantic City parlors attract.

Pennsylvania casinos draw mostly a local and regional crowd, bettors living 50 or 100 miles away, and with travel costs rising, that's proving to be an advantage.

Atlantic City casino revenue also might have been hurt by the imposition of a smoking ban, but that has just been lifted. A new anti-smoking law in Pennsylvania, which took effect Sept. 11, limits smoking to 25 percent of a casino floor.

Pennsylvania's first casino, the Mohegan Sun, opened at the Pocono Downs racetrack near Wilkes-Barre in November 2006.

In October 2008, the five Pennsylvania casinos that had operated for at least a year raked in $102.2 million in "gross terminal revenue" -- the amount that's left after winners are paid.

That's a 3.4 percent gain in profits compared to the five casinos' take of $98.9 million in October 2007. Besides Mohegan Sun and The Meadows, the state has two casinos in suburban Philadelphia, Harrah's at Chester Downs and Philadelphia Park, as well as Presque Isle Downs in Erie.

In Pennsylvania, the state applies a 55 percent tax on gross terminal revenue, with the rest going to the casino owner. The state's share goes for four goals: reducing property taxes for homeowners; aiding the horse-breeding industry; generating funds for projects in Pittsburgh (including the new arena) and Philadelphia; and providing funds for the casinos' host counties and cities.

Gov. Ed Rendell, who pushed strongly for casinos in 2003-04, said that slots produced $780 million this year for property tax relief for homeowners, as well as rent relief for lower-income senior citizens.

Besides the initial five casinos, two more have opened since October 2007 -- Hollywood Casino at Penn National, near Harrisburg, and Mount Airy casino in the Poconos.

The governor has predicted that well over $1 billion a year will be generated for tax relief when all 14 casinos authorized by the 2004 law are open in the next several years. Two large casinos planned for central Philadelphia have been stalled by strong resident protests.

The financial picture would seem to look good, at least for the near future, as more casinos are to open in 2009. These include a larger, permanent casino at The Meadows due to open in May; the now-under-construction Rivers Casino on Pittsburgh's North Shore that's to open in August; and a casino in Bethlehem, Northampton County, to open next summer.

Maryland recently legalized up to 15,000 slot machines at five locations in that state, which could draw customers from Pennsylvania casinos.

"There are a number of variables, such as the [recessionary] economy, competition and the smoking ban that will come into play as Pennsylvania's casino market continues to mature," said acting state Gaming Control Board Director Frank Donaghue.