As merger nears, Dover Downs reports meager profit for 2018

DOVER — After a positive fourth quarter, Dover Downs finished the year in the black — barely. The casino reported a net profit of $30,000 in 2018 after losing about $1.14 million the year prior.

Dover Downs, the only publicly traded company among Delaware’s three casinos, made a profit of $419,000 in the final three months of 2018, according to documents filed with the U.S. Securities and Exchange Commission Thursday.

Total revenue for the company was up about $3.5 million for 2018 versus the year before, with around two-thirds of that growth coming in October, November and December.

The company’s debt totals $15 million.

Gamblers bet about $87 million on sports statewide after Delaware unveiled full-scale sports betting in June, the result of a U.S. Supreme Court ruling. About $15.9 million of that was bet at Dover Downs, with the casino keeping approximately $666,000.

Legislators at the end of June passed a bill lowering the tax rate on slots by 1 percent, nearly halving the table game tax rate and suspending the $3 million table game license fee. The slot tax rate will be reduced another 2 percent on July 1 if the casinos invest a significant portion of revenue (3 percent of net proceeds) in capital projects.

In addition to the relief bill, the company received more positive news over the summer when it was announced Rhode Island-based gaming company Twin River Worldwide Holdings Inc. would merge with Dover Downs. Twin River reported net revenue of about $429 million and net income of close to $64 million in 2017.

Denis McGlynn

Dover Downs President and CEO Denis McGlynn said last month the deal was expected to be completed within the first three months of 2019.

The legislation, the product of years of lobbying by casino executives and others, was the result of a compromise between the gambling industry, the executive branch and the General Assembly. Gaming executives and supporters had stumped for relief for years, arguing a failure to bring about financial assistance could lead to a loss of jobs and a reduction in state revenue.

State officials in the spring estimated the casinos employed about 4,500 people, of whom around 2,000 were full-time.

“We didn’t get everything that I think we really need for the long run, but I think we have enough to hold us for the foreseeable near future,” Mr. McGlynn said in April after the Senate passed the first version of the relief bill.

“No telling what’s going to happen. We have more competition on the way, but as was described in there — I think fairly accurately — while the competition really has created the situation, the biggest driver of the situation we’re in now is the state’s share.”

Prior to June, lawmakers had last provided assistance to the casinos in 2014, when they approved a bill shifting some of the slot vendor fees to the state.

Dover Downs’ financial situation has been up and down in recent years. It made a combined $2.66 million in 2016 and 2015 but lost $706,000 in 2014 and reported a profit of just $13,000 in 2013.

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