Dover Downs to be sold to Rhode Island gaming firm

DOVER — Dover Downs Hotel & Casino will be acquired by Rhode Island-based gaming company Twin River Worldwide Holdings Inc.

Dover Downs President and CEO Denis McGlynn had no trouble describing what the deal means to Delaware’s only public casino.

“I guess in a word, stability,” he said.

Dover Downs has struggled in recent years due to competition from neighboring states and tax rates executives describe as onerous.

The deal comes less than a month after the General Assembly passed and the governor signed legislation aimed at reducing the burden on the casinos, with the hope of making it easier for them to prosper.

Supporters believe the change, which reduced the slot tax rate 1 percent, slashed the table game tax rate from 29.4 to 15.5 percent and suspended the $3 million table game license fee, will help protect jobs and the nine-figure sum the state annually receives from the casinos.

In addition to the casino, the sale includes Dover Downs’ 500-room hotel and banquet hall.

Dover International Speedway, which is owned by Dover Motorsports, will not be affected. Dover Motorsports split off from the gaming company in 2002.

The sale, which is expected to take about six to nine months to be finalized, gives Dover Downs a good chance for growth, Mr. McGlynn said.

“If you look at the climate in which we’re operating here with such huge casinos in the metro areas surrounding Delaware and what we need to do to be able to compete at that level, having the resources and the strength of a big company like Twin River gives us the expectations and ultimately the realization that they’ll be investing in our people and our programs and our facilities to make sure that we can compete at the highest level and be successful,” he said.

With the merger, Twin River, a privately held company, will go public, and Dover Downs shareholders will exchange their stock for Twin River shares. Dover Downs stock will represent about 7.2 percent of the equity in the combined company.

The price of the sale was not disclosed.

In 2017, Twin River reported net revenue of about $428.8 million and net income of $63.5 million. Dover Downs lost nearly $1.1 million last year, the second time in four years it has ended the year in the red.

Twin River approached Dover Downs, Mr. McGlynn said, and the companies had been talking for about a year. He said executives never discussed the deal as being contingent on the casino relief bill.

The measure won approval in the Legislature on the last night of the session calendar after unsuccessful efforts by some lawmakers to provide financial assistance in 2015, 2016 and 2017.

The announcement may not win Dover Downs favor with legislators. Monday, Rep. Dave Bentz, a Newark Democrat who was one of seven lawmakers to vote against the final bill, tweeted: “I don’t know if the outcome would’ve been different (I still would’ve voted no), but this is the sort of thing a business should give legislators a heads up about when asking for a massive tax relief bill.”

Mr. McGlynn said a decision about if the deal will lead to the company hiring more employees will be made in the future. Dover Downs had 1,346 employees, of which 849 were full-time, as of the end of 2017, according to a Securities and Exchange Commission filing.

The agreement still must be approved by authorities, as well as Dover Downs shareholders.

Whether Dover Downs will adopt a new name also remains to be seen, although Mr. McGlynn noted previous acquisitions by Twin River in Mississippi, Colorado and Rhode Island kept their names.

Jeffrey Rollins, a member of Dover Downs’ board of directors and a son of company cofounder John Rollins, will join the Twin River board of directors.

“We’re excited about the many benefits we believe we will realize from the combination,” Twin River Executive Chairman John E. Taylor Jr. said in a statement. “Dover Downs and its team are experienced in not only brick and mortar casino operations, but in sports betting, which we think will be helpful as we introduce that amenity at our properties, and in the online gaming sector which continues to evolve nationwide.

“Equally important, we see real opportunities to grow the Dover Downs business through investment in its people and facilities, similar to what we have achieved with our other assets over the past several years.”

A spokesman for Gov. John Carney referred questions to the Department of Finance. In a joint statement, Secretary of Finance Rick Geisenberger and Secretary of Agriculture Michael Scuse said they will monitor the agreement and “ensure it is consistent with Delaware law.”

Dover Downs stock rose about 50 percent, from around $2 to $3, Monday.

Reach staff writer Matt Bittle at mbittle@newszap.com

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