The Delaware Video Lottery Advisory Council (VLAC) is again ready to recommend that state lawmakers cut the table-game revenue tax from its current 29.5 percent to 15 percent, according to comments by the council’s chairman to a local TV news organization.
Created in a 2003 law, the VLAC includes state Lottery Director Vernon Kirk, supplier representatives, and presidents of the three racinos—Edward J. Sutor of Dover Downs, Patti Key of Harrington Raceway and Bill Fasy of Delaware Park. The council is charged with making recommendations to Delaware lawmakers on ways to improve state revenue from the three casino properties.
For each of the past several years, the council has recommended slashing revenue taxes and fees for the racinos to compensate for business lost to new competitors in Maryland and Pennsylvania. Sutor, president and CEO of Dover Downs and current chairman of the VLAC, told local news channel WBOC 16 that this year’s recommendations, due in a January report, will most definitely include a cut to the tax on table-game revenues.
It will be a revival of a recommendation made in each of the past several years—that the tax on table revenues be reduced from the current 29.5 percent to 15 percent, which would be more in line with the tax charged in neighboring states.
“We can’t sustain ourselves losing money,” said Sutor, who noted that when fees and labor costs are factored in, the three racinos are actually losing money on their table game operations, which is in line with the VLAC reports of the past three years.
In last year’s VLAC report to lawmakers, the council described the justification for a table tax reduction.
“Delaware has the highest table game tax rate in the country,” the report stated. “Maryland’s rate is 20 percent, Pennsylvania’s rate is 14 percent, and New Jersey’s is 8 percent. With annual license fees, Delaware’s effective revenue share rate on table games is almost 40 percent, and combined with the overhead required in terms of payroll costs makes table game operations unprofitable for the state’s three casinos.”
Delaware Governor John Carney, in an interview with WBOC 16, acknowledged that his government is trying to determine some tax relief for the casinos, but that it is too early to talk about individual proposals.
“It is really hard, because it probably means changing the formula in some kind of way that benefits them to the detriment (of the state) to a certain extent,” Carney said.
In just the past three years, the table-tax proposal has been included in the council’s recommendations but has failed in the state Senate. It was inserted then removed from SB 220 in 2014, and then it was included in SB 30 in 2015 and SB 183 in 2016, each of which died without reaching a floor vote.
Meanwhile, in anticipation of the arrival of table games before the end of the year, the Casino at Ocean Downs in Berlin, Maryland is recruiting potential candidates to become dealers. A state program is funding a tuition-free dealer school. Ocean Downs General Manager Bobbi Sample said, “When students successfully complete a class in blackjack, they will have the opportunity to audition to become a dealer here at Ocean Downs. They will continue their education at the school and learn how to deal other games and expand their opportunities.”
The new dealers and table games will be stationed at a 35,000 square foot expansion at the casino. “Construction of the expansion is moving forward. Our goal is to open the expansion and table games by New Year’s Eve,” Sample said.
Ocean Downs opened in September 2011 as the first of four of the original locations the Maryland legislature approved for casinos in different geographic areas of the state. Since then the casino has offered 800 video gaming machines, including traditional slots and simulated electronic table games. The casino has remained the sole gaming facility among the six in Maryland that does not offer live table games.
