Casinos to plead for legislative relief again

 

DOVER — Delaware’s casinos are set to make the same recommendations for legislative relief for the third year in a row.

At a meeting of the Video Lottery Advisory Council Tuesday, casino executives laid out details of the current picture. The market remains “saturated” because of competition in neighboring states, Dover Downs Hotel & Casino President and CEO Ed Sutor. Combined with tax rates the casinos see as stifling, the out-of-state attractions are hurting the state’s gaming industry, although Dover Downs did make a profit of $1.9 million in 2015.

The plan the council is set to approve next month would contain several recommendations, listed in order of preference.

Ed Sutor

Ed Sutor

The first option would be to alter the revenue-sharing formula, lowering the tax rates when revenue is down and increasing them when more money is flowing in.

The casinos will also suggest having the state pay all the slot vendor costs. In 2014, lawmakers agreed the state would take on 75 percent of the vendor costs, at a cost of $9 million.

Another proposal has two facets that deal with table games. Both parts would eliminate the annual license fee of $3 million, while the first would slice the table game tax rate from 29.4 percent to 15 percent. The second would have the state share in the cost of vendor fees instead.

According to Mr. Sutor, Dover Downs has never turned a profit off of table games.

“Why do we keep it? We want to be a full-fledged casino,” he said. “If we took it out we’d be a slot bar, something we had been for years and we despised.”

The final part of the recommendations calls for implementing marketing and capital credits, essentially incentivizing the casinos to invest more in themselves.

If nothing is done, proponents of legislative help say, the casinos could go under.

But news of a drop in projected revenues just the day before does not bode well for their chances when the General Assembly convenes next year.

Opponents see the relief plans as a bailout and argue the state cannot afford to voluntarily take steps that would in the short term hurt its revenue forecast.

In other bad news for Delaware’s casino executives, MGM National Harbor, located about two hours away from Dover Downs in Maryland, is scheduled to open by the end of the year.

Dover Downs would be hit not just on the gaming front.

“They’re going to have quite an opportunity to get those conventions and convention business into those 2,000 rooms, as well as the 300 rooms they’re building,” Mr. Sutor said in reference to hotels in and around National Harbor.

Two separate bills to provide some measure of relief to the casinos failed to gain momentum over the past legislative session.

“Let’s hope with a new governor, with a new administration, if we come in with November recommendations, that somehow gets put in the budget,” Mr. Sutor said Tuesday.

Members of the committee also briefly discussed a possible conflict between the casinos and the horseracing industry, which receives some of the revenue generated by slots and table games.

The two proposals that would have the state share in more of the vendor fees would effectively leave less money for the horsemen. Disagreement between the casinos and the horsemen could lead to lawmakers doing nothing, according to lobbyist Rebecca Kidner.

“It muddies the water,” Ms. Kidner, who represents the Delaware Standardbred Owners Association, said. “Instead of them diving in and really understanding it, they start to do nothing.”

Reach staff writer Matt Bittle at mbittle@newszap.com

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