Another quarterly loss leaves Dover Downs seeking help

The exterior of the casino at Dover Downs Hotel and Casino. The state’s only public casino revealed Thursday it lost $239,000 in the first three months of 2016, intensifying the need for state action. (Delaware State News/Dave Chambers)

The exterior of the casino at Dover Downs Hotel and Casino. The state’s only public casino revealed Thursday it lost $239,000 in the first three months of 2016, intensifying the need for state action. (Delaware State News/Dave Chambers)

DOVER — Dover Downs Casino made $1.9 million in profit in 2015, a small sum relative to past standards, but certainly preferable to the $706,000 loss it suffered the previously year.

Unfortunately for the casino, 2016 is off to a bad start that leaves executives crossing their fingers for legislation relief.

The state’s only public casino revealed Thursday it lost $239,000 in the first three months of 2016, intensifying the need for state action.

Casino executives say the revenue-sharing model, combined with out-of-state competition, leaves Dover Downs struggling.

“Our fate remains in the hands of our state legislature,” company president and CEO Denis McGlynn said in a statement.

Denis McGlynn

Denis McGlynn

“Recommendations of the legislatively-appointed Gaming and Lottery Study Commission need to be enacted for the health of our industry and for thousands of employees whose livelihood depends — directly and indirectly — on having Delaware’s casinos able to compete effectively in the regional marketplace.

“It is imperative that we re-invest in our facilities and amenities. And if we cannot spend the marketing and promotional dollars that will bring repeat customers into Delaware, they will go to neighboring jurisdictions.”

Revenue has plunged over the past 10 years, the result of competition in neighboring states and a tax rate casino supporters say is too high.

A bill to alter the revenue-sharing formula, slice the table game tax and implement marketing and capital credits went nowhere in 2015, but similar legislation was introduced in January. Supporters appear cautiously optimistic.

Main sponsor Sen. Brian Bushweller, D-Dover, said there “is an increasing level of casual discussion going on about the bill.”

He citing measures passed earlier this year that were aimed at keeping parts of chemical giant DuPont in the state after its merger with Dow Chemical.

Sen. Bushweller said lawmakers need to act to save the thousands of jobs provided by the casinos.

“Of course, my point about the casinos is we got jobs here and we got economic activity here,” he said.

His proposal has bipartisan support, with all of the co-sponsors coming from Kent or Sussex counties.

Even if the specific solutions offered by his bill are not acted upon, Sen. Bushweller said he believes it can be used as a starting point.

But others see the idea as a taxpayer-funded bailout. The bill would take money out of the state’s coffers, starting at $13.9 million and steadily rising to $44.6 million by year four.

Opponents say not only can Delaware’s government not afford to lose that money, it has no obligation to assist the casinos.

“I would open up the market to allow three more casinos to come in and go through a bidding process” with a minimum bid of $50 million per license, said Rep. Charles Potter Jr, D-Wilmington.

The casinos had little competition for a decade and failed to prepare for the possibility the industry would struggle one day, he said. He believes enough help, such as a 2014 bill that shifted more of the slot vendor costs to the state, has been provided already.

Supporters like Sen. Bushweller counter that failure at the casinos would result in a large job loss, particularly impacting Kent County,

Sen. Brian Bushweller

Sen. Brian Bushweller

which is home to Dover Downs and Harrington Raceway and Casino.

Currently, Dover Downs is $31 million in debt. That sum is due to be repaid Sept. 30, although officials there are hoping for yet another extension. Should no relief arrive, the casino would have to continue to cut back, Mr. McGlynn said.

Dover Downs laid off 72 employees in 2015 and has shifted “as much of the increases in medical costs on employees as we dare to,” he said in a conference call Thursday.

Although he declined to predict the likelihood of changes, he does believe the plight of the casinos is heard in Legislative Hall.

Sen. Bushweller took a similar stance last week, stating the “issue is not dead.”

“My honest belief is I think we may very well be able to address the casino issue in some way, some meaningful way this year,” he said.

Reach staff writer Matt Bittle at mbittle@newszap.com

You are encouraged to leave relevant comments but engaging in personal attacks, threats, online bullying or commercial spam will not be allowed. All comments should remain within the bounds of fair play and civility. (You can disagree with others courteously, without being disagreeable.) Feel free to express yourself but keep an open mind toward finding value in what others say. To report abuse or spam, click the X in the upper right corner of the comment box.