DOVER — Dover Downs made a profit of $786,000 in 2016, down from $1.87 million the year before.
The company closed the year on a negative note, reporting a loss of $291,000 in the fourth quarter of the year, according to earning statements filed with the U.S. Securities and Exchange Commission Thursday.
“Our results for the fourth quarter and for the year reflect the continuing challenges the company and our fellow Delaware casinos face with the formula for gaming revenue distribution within the state,” President and CEO Denis McGlynn said in a conference call. “In 2016, Dover Downs generated $77 million for the state and the horsemen, while the company carried more than $180 million in expenses and was left with less than one half of 1 percent profit margin.
“Exacerbating the state’s unbalanced gaming revenue sharing formula is the astounding increase in health care costs most employers are dealing with. The Delaware gaming industry has generated $3.8 billion that has gone directly to the state’s General Fund over the years and has become an employer of 4,500 mostly Delaware citizens. It’s our hope that a restructuring of the relationship with the state will be undertaken during the current legislative session to protect this valuable contribution of revenue and employment for the state.”
Delaware’s casinos have seen a decline in revenue over the past decade as a result of competition from neighboring states, and gambling executives have repeatedly said they believe the tax rates are too high.
Some lawmakers tried to provide tax breaks to the casinos in the prior General Assembly, but their efforts went nowhere.
Sen. Brian Bushweller, a Dover Democrat who has been a strong proponent of restructuring the revenue-sharing formula, said earlier this month he does plan to once again bring legislation to aid the casinos.
“Exactly how we’re going to work it is still up in the air but the fact of the matter is the situation basically has not changed,” he said.
Total revenue in the fourth quarter of 2016 was down $1.87 million from the same three months of 2015. For the year, it was short about $650,000.
Dover Downs was hurt slightly by “extremely lucky” sports bettors, according to Timothy Horne, senior vice president of finance.
For October, November and December, Dover Downs saw decreased hotel occupancy, and it was also impacted by part of Dover International Speedway’s NASCAR weekend being held in the third quarter this year.
The company’s total debt is $25.25 million. It is due Sept. 30.
Reach staff writer Matt Bittle at firstname.lastname@example.org