One truth that kept asserting itself at this industry meeting: Sometimes less is more.

The good folks at Spectrum Gaming held their annual Pennsylvania Gaming Congress last month in Philadelphia, and there was an abundance of wisdom in the room, all of it coming from people who have learned the hard way.

The main message was, hunker down, manage your business, pick and choose your spots for growth. Not just operators, but the public sector, which seemingly never tires of turning to gaming to address their short- and long-term financial problems.

Not that the gaming industry is complaining about the latter tendency. After all, the one silver lining in this recession (is it over? I can’t tell) has been the opportunity to open up new projects in previously underserved markets, all thanks to state fiscal pressures.

And, of course, Pennsylvania might not be the best venue to preach prudence right now. Since getting into the game in 2006, the state’s revenues have steadily grown, to the point where it is set to pass the $3 billion mark in annual gross gaming revenue next year and overtake Atlantic City. That’s with only 10 properties up and running, out of a potential total of 14.

“Pennsylvania has exceeded my expectations,” said Andrew Zarnett, managing director, Deutsche Bank. “Now, the prudent thing to do would be to put a moratorium on licenses. If you want operators to reinvest in their properties, you go slow from here.”

It’s worth noting; Wall Street is telling state governments to slow down.

Pennsylvania still has to decide whether to put another casino in downtown Philadelphia, one in the center of the state and whether to add to the state’s racetrack gaming mix. Any increase in intrastate competition would force hard choices on existing operators looking to add non-gaming amenities such as hotels, additional rooms, retail shops and entertainment venues.

“A hotel gets you an extra hour of play at night, an extra hour in the morning as well as expanded market coverage because people aren’t afraid of driving while they’re tired,” said Adam Steinberg, an independent analyst who has covered gaming for about 20 years. Giving players a place to crash is just the kind of thing that could help a Pennsylvania-based property blunt the effects of new gaming supply on the perimeter of their markets, as long as their markets aren’t being redefined from within, of course.

“There is only one gaming hotel open in Pennsylvania,” noted Alex Picou, managing director, FBR Capital Markets & Co. “If you want your casinos to grow into destinations and compete with surrounding states, you would hold the licenses.” He added that he expected the challenging economic climate to last another four to six years. Ouch.

A moratorium would also give the state’s racetrack gaming facilities a more hospitable environment in which to get their own supply issues right. The conference kicked off with its annual Mid-Atlantic Racing forum, where some of the ideas that have been percolating in the industry for awhile were addressed.

One is reducing the supply of racing, which just about everyone agrees is out of line with demand. Chris McErlean, VP of racing for Penn National Gaming, noted that there are presently 49,000 races and 5,700 race dates in the U.S. market, numbers that will not be supported by economically-challenged breeders in the long run. “There will be less inventory for those race dates in the future.”

It helps if operators can grab the ball themselves, which is what Jeff Gural has done at Vernon Downs and Tioga Downs in upstate New York. Tom Osiecki, president and general manager at those facilities noted that the racing season there is confined to 61 days, limited to Fridays, Saturdays and Sundays, and runs from May to September. The pared down schedule gives the marketing department an opportunity to build some excitement into each race date, with food-and-beverage specials, merchandise giveaways, fireworks nights, fan appreciation days and the like.

That such a stripped-down approach to supply comes from Gural is significant, in that you’d be hard pressed to find someone else in the racetrack gaming business who is more passionate about the unprofitable side of his business. He has hit on a truth that kept asserting itself at this industry meeting: Sometimes less is more.