Delaware Casinos Seek Long-Term Fix

Delaware casinos are asking the state panel slated to convene in the fall to address the long-term drag on profits resulting from high state revenue cuts. Dover Downs President and CEO Ed Sutor (l.) says tax rates need to be cut for the industry to remain competitive.

The recent .9 million bailout of Delaware’s three racinos, which many lawmakers insist is a one-time deal, will not make the casinos solvent in the long term, according to the head of Dover Downs, one of the three properties.

In an interview with Delaware’s NPR radio news affiliate, Dover Downs President and CEO Ed Sutor said the problem of declining revenues at the state’s three casinos goes beyond what has been stated in the media and by state lawmakers, who observe that new competition in Maryland and Pennsylvania caused the decline.

Sutor says a more basic problem hampering recovery of the state’s racinos from competitive pressures is the high revenue tax imposed by the state. Casino officials are urging members of the Delaware Lottery and Gaming Study Commission, the state panel that recommended the bailout measures, to look at the revenue taxes and fees again when it reconvenes in the fall.

The extension of the panel for another year was a provision of the law passed to implement the bailout. Among the panel’s initial recommendations was a reduction in the table game tax and elimination of several recurring fees.

Sutor told NPR that the casinos want the panel to look into creating new tax credits for capital improvements, something done in other gaming states. “We put up all the money and the state gets the majority of the revenue from it,” he said. “So, in order for us to continue to do big things, other states have given credit to casinos for adding hotel rooms.”

Sutor also said such measures stand a good chance of winning support in the legislature, pointing to the overwhelming vote of lawmakers to implement the bailout plan. “It wasn’t close,” Sutor said of the vote. “It was overwhelmingly positive for our industry. Our position is that the public still doesn’t get it.”

The Lottery and Gaming Study Commission will reconvene by mid-September.

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