Recommendations delayed one month
A panel of Delaware government officials missed its January 31 deadline to deliver a report to the state legislature recommending how to help the state’s ailing racinos.
The Delaware Lottery and Gaming Study Commission, created last fall to consider tax breaks, elimination of fees and even creation of non-racetrack casinos as ways to boost sagging gaming revenue to the state, has not been able to agree on the best path to stem losses by the state’s three racinos. Executives of the three racinos—Delaware Park, Dover Downs and Harrington Raceway—have made presentations before the commission outlining losses each has experienced from new competition in Maryland and Pennsylvania, a burden they say has been exacerbated by the state’s high revenue tax and fee structure.
Neither the legalization of table games, limited parlay-style betting on NFL games, nor the launch of internet gaming (hampered by the tiny size of the state) has helped turn the profit picture around for the racinos.
The racino executives have pleaded for a reduction in the gaming revenue tax, now effectively over 60 percent, and reduction or elimination of various recurring fees. Investors for developers seeking non-racetrack casinos in New Castle and Sussex counties have testified before the commission that too much of the racinos’ profits have gone to dividends and bonuses for executives, and have plugged the new revenue possible from new, carefully placed venues—a prospect operators say will put one or more of the current facilities out of business.
The nine-member commission, chaired by state Finance Secretary Tom Cook, includes a bipartisan group of lawmakers, a representative from the State Chamber of Commerce and Alan Levin, director of the Delaware Economic Development Office.
Last week, Cook informed the legislature that the group will need until February 28 to deliver its report to lawmakers. According to an Associated Press report, a key issue is weighing the hit to the state General Fund against any tax or fee breaks given to the casinos. Members are considering reductions in the state cut of gaming revenues, and redistributing profits among casinos, horse-racing operations and the general fund.
“This is something that deserves the appropriate amount of time,” Cook told Delaware’s News Journal, “and the commission has worked hard for the past six months, but we’re just not totally there to make a quality recommendation.”
Meanwhile, results reported for the fourth quarter of 2013 provided little relief for Delaware properties, other than a narrower quarterly loss for Dover Downs Gaming and Entertainment. Net earnings for the year were only $13,000, compared to $4.8 million in 2012.
“I think the numbers validate the story we’ve been telling everyone basically, and most particularly those who do control our destiny,” Dover Downs President and CEO Denis McGlynn told the News Journal. “It doesn’t take a rocket scientist to figure out what next year is going to look like.”
The state’s two other racinos are private and do not report revenue figures publicly. However, officials of Delaware Park told the panel they expect a 17 percent drop in 2013 revenues, with Harrington projecting a 4 percent drop.
