A bill introduced in the Delaware Senate would lower the state’s onerous slot revenue tax from an effective 62 percent to 15 percent. It is the latest in a long line of legislative efforts to ease the competitive burden on the state’s three racinos, which have struggled to battle new competition in Maryland and Pennsylvania.
In addition to lowering the slot tax, the bill would give credits back to casinos for capital expenditures, and would eliminate the $3 million annual fee casinos pay for licenses to operate table games.
The latest push to lower taxes follows a long line of failed attempts to ease the tax burden on the casinos, which have had to initiate layoffs and say more are in the offing without easing the revenue taxes and eliminating many of the fees the casinos now pay—recommendations made repeatedly by a blue-ribbon state government panel examining ways to help the industry.
The recommendations have thus far been rejected as a “bailout” of a casino industry that should be helping itself. Initial analysis of the situation indicates this bill also could be dead on arrival, as the office of Governor Jack Markell told local station WBOC that he cannot endorse the expense of a casino tax cut when next year’s budget is extremely tight.
Dover Downs CEO Ed Sutor, who has been the racino industry’s voice on the tax issue, told WBOC that the tax-and-fee hit on casinos will not allow for profitability, particularly when the MGM National Harbor resort casino opens later this year in Maryland.
“When you lose $700,000, something has to give,” Sutor said, referring to the casino’s latest quarterly results. “You can’t continue to pay your mortgage, continue to pay all your employees, continue to market… You have two things that we control in the way of expense—marketing and payroll. If you cut payroll, how do you do that? There’s going to be less people in this building. If you cut marketing, the customers are not going to come. They’ve got a bright, shiny new place over in Maryland.”
