Dover Downs makes profit but execs say issues remain

 

DOVER — Dover Downs made $796,000 in the second quarter of 2016, the company announced Thursday. After a loss of $239,000 from January to March, the casino now stands at $557,000 in the black this year.

At this point in 2015, it had a net gain of $279,000, en route to a profit of $1.9 million. Dover Downs, the only public casino out of Delaware’s three gambling establishments, made about $1.5 million more this quarter than it did the previous one, although it also spent more.

Despite efforts from the casino and sympathetic lawmakers, the General Assembly did not, for the second consecutive year, pass any form of relief. Bills that would have lowered the table game tax rate and created marketing and capital credits went nowhere, leaving casino executives frustrated.

“We were disappointed that the state budget shortfall that was revealed late in the legislative session pre-empted consideration of the recommended changes to the casino industry’s revenue-sharing model set forth in Senate Bill 183,” Dover Downs Gaming & Entertainment President and CEO Denis McGlynn said in a statement. “Needless to say, we will continue to pursue this much-needed legislation in January when the legislature returns.”

Executives have argued for years changes are needed to keep the state’s gambling industry viable due to out-of-state competition and tax rates the casinos see as too high.

The company paid off $3 million in debt in the second quarter, bringing the total it owes down to $28 million. Although that sum is scheduled to be paid back by Sept. 30, the due date has been pushed back several years already, and officials are seeking another extension.

Gaming revenue was down about $300,000 from the first quarter to the second quarter, while other revenue was up $1.8 million.

Mr. McGlynn said in an interview Thursday the company is left waiting to see if lawmakers do approve any form of change that would help the financial picture for Dover Downs. While the second-quarter profit was welcome news, much of that is due to cutbacks rather than additional intake, he said.

An MGM Resorts casino located in National Harbor, Maryland, is set to open toward the end of this year, a prospect that poses bad news for Delaware’s casinos.

Dover Downs in 2015 cut 72 positions, although not all were filled at the time. While it has no plans to eliminate more jobs, Mr. McGlynn did not dismiss the possibility of that happening in the future.

“It’s the last thing we want to do, but if it comes to that we’re going to have to consider that,” he said.

The outlook is rosier for Dover Motorsports. A separate company from Dover Downs, the corporation made $5.1 million from March to June, down $400,000 from one year earlier. The second quarter this year included a NASCAR race and the Firefly Music Festival but not the Big Barrel Country Music Festival, which began in 2015 and lasted only one year.

Reach staff writer Matt Bittle at mbittle@newszap.com

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