Delaware casinos see small gain in Q3

DOVER — After 34 straight quarters of declining slot revenues across the state, the third quarter of 2015 brings some relief for Delaware’s three casinos — barely.

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Ed Sutor

Ed Sutor, president and CEO of Dover Downs Hotel and Casino, said during a Tuesday meeting of the Video Lottery Advisory Council there was a slight uptick in slot play from June 1 to Sept. 30, the result of stability and low gas prices.

No new casino has opened in a neighboring state since Baltimore’s Horseshoe Casino began business in August 2014. However, that stability is not expected to last.

“If anything, the future looks like it’s going to get even tighter,” Mr. Sutor said.

MGM National Harbor is set to open next year in Maryland’s Prince George’s County.

Meanwhile, Delaware casinos continue to push for relief, although their efforts went unmet in this year’s General Assembly session.

Members of the VLAC voted Tuesday to formally endorse the same package as last year, which will be presented to the secretary of finance next week.

In order of VLAC members’ preference, they are:

•Change the flat tax to a tiered structure, which was originally used when the state added casinos in 1994

•Pay slot vendors fees entirely before splitting the revenue, as opposed to afterward

•Remove the table game license fee and cut the tax rate from 29.4 percent to 15 percent, or eliminate the license cost and split operator costs among the state, casinos and horsemen

•Adopt marketing and capital credits, each consisting of 5 percent of revenue.

A group of lawmakers introduced legislation in January to do many of those things, but the bill did not even get an initial committee hearing.

Mr. Sutor said Tuesday he remains hopeful and noted Dover Downs is open to discussions with legislators about phasing in or scaling back some of the elements of the proposal.

Executives continue to insist aid is vital to their survival.

“In the state of West Virginia, they have annual marketing subsidies to the casinos who advertise out of state,” Mr. Sutor said. “It’s easy to understand that. In fact, I would think the state of Delaware would be much more in-tune with that, allowing us to bring business from out of state by giving us incentives to advertise and market out of state to bring those customers to our fine state.”

The General Assembly is facing a larger budget crunch than last year’s, which caused many other problems to be pushed to the side. Cooperation between lawmakers of different parties, something that was lacking last year at times, will be key if relief is to be passed.

Dover Downs cut 72 positions in the first six months of 2015, and the company is set to reveal its third-quarter finances tomorrow. Casino officials can only control marketing and payroll, and both play a large role in operations, limiting how much can be scaled down, Mr. Sutor said.

Executives from Dover Downs, Delaware Park and Harrington Raceway and Casino said their establishments are in need of capital renovations but they lack the money to undergo such projects.

The legislature reconvenes in January.

Reach staff writer Matt Bittle at mbittle@newszap.com

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