Dover Downs barely breaks even during 2nd quarter

 

DOVER — Dover Downs made $32,000 in the second quarter of 2017, not enough to cover its first quarter losses. The company was $152,000 in the red this year as of June 30.

It made $796,000 through the first six months of 2016.

Dover Downs, the state’s only public casino, announced its earning Thursday, nine days after the Video Lottery Advisory Council painted a grim picture for the casino industry in Delaware.

The company brought in about $43.3 million from April 1 to June 30, about $2.9 million less than the same period last year.

That’s largely due to an “increasingly competitive” market, said Denis McGlynn, president and CEO of Dover Down. The opening of Maryland’s MGM National Harbor in December led to casinos in Maryland and West Virginia ramping up marketing efforts, in turn drawing some customers away from Delaware.

“We’re continuing to analyze the market changes and adjusting our response accordingly, and simultaneously we’re continuing to press our case to the current administration that more marketing resources are needed in order to improve the Delaware casino industry’s competitiveness. … Reduced gaming taxes would provide resources for marketing and capital improvements, which would broaden our ability to succeed across a broader section of players,” Mr. McGlynn said on a conference call.

Denis McGlynn

Hotel occupancy fell from 88 percent last year to 85 percent in the second quarter this time around, and the second-quarter numbers are also hurt by Easter falling in April as opposed to March. By law, Delaware casinos cannot operate on Easter and Christmas, which Dover Downs Hotel & Casino President and CEO Ed Sutor recently estimated costs the casino about $2.25 million annually.

“We did a pretty good job of keeping expenses down in the quarter but the lower volumes and the extremely high tax rates obviously impact our margins,” chief financial officer Tim Horne said Thursday.

Dover Downs ended up keeping 42 percent of its proceeds last year, with the remainder going to the state, the horseracing industry and slot-machine vendors. The company made a profit of $786,000 last year and $1.87 million in 2015 after losing $706,000 in 2014.

Dover Downs is $23 million in debt, although it recently extended the due date from Sept. 30, 2017, by one year.

Dover Motorsports had a much better quarter, reporting a profit of $5.2 million. It brought in $25.6 million, primarily through June’s NASCAR race and Firefly Music Festival.

The company stands slightly ahead of last year’s pace with a total profit of $2.8 million through the first six months of 2017.

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