Dover Downs turns a profit in second quarter

President and CEO of Dover Downs Denis McGlynn speaks during the first full slate sports betting press conference at the Dover Downs Sports in Dover.

DOVER — Dover Downs Hotel & Casino made a profit in the second quarter of 2018, but is still in the red for the year.

The company, which announced a planned sale to Rhode Island-based gaming company Twin River Worldwide Holdings Inc. earlier this week, unveiled its quarterly earnings Thursday.

The numbers reveal a net gain of $153,000 from April to June. The casino lost $273,000 in the first three months of 2018.

Business is expected to pick up for Dover Downs, as well as the private casinos Delaware Park and Harrington Raceway & Casino, due to the legalization of full-scale sports betting and, more importantly, a bill passed at the end of the legislative session.

The measure, approved by a strong majority in both chambers, lowers the tax rate on slots by 1 percent, cuts the tax rate on table games nearly in half and suspends the $3 million table game license fee.

Starting July 1, the overall tax rate will be reduced another 2 percent if the casinos invest a significant portion of revenue (3 percent of net proceeds) in capital projects.

Gaming executives and advocates have 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.

“I want to take this opportunity to thank the Legislature and the Administration for listening to the needs of the casino industry in Delaware,” Dover Downs President and CEO Denis McGlynn said in a statement. “The modification to the gaming tax structure will help us going forward as we continue to improve our performance in this intensely competitive market.”

Dover Downs’ deal with Twin Rivers is expected to be completed in the first few months of 2019. The sale must be approved by authorities and Dover Downs shareholders.

The price of the sale was not disclosed.

Twin River will go public after the deal is finalized, and individuals who own stock in Dover Downs will see their shares converted into Twin River stock. Dover Downs stock will represent about 7.2 percent of the equity in the combined company.

After the deal was announced, Dover Downs stock shot up from about $2 to around $3.

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.

“They think they can help us grow all this, and so I think it’s a good fit for them and a good fit for us,” Mr. McGlynn said Monday.

Dover Downs’ revenue was up about $240,000 from the first quarter to the second. Its debt totals $18 million.

Sports betting, which was previously limited to parlays on NFL teams, was expanded on June 5, with Delaware becoming the first state to take advantage of a U.S. Supreme Court ruling striking down a ban on sports gambling.

A total of $1.18 million was wagered on sports at Dover Downs from June 5 to the end of the month, with the casino keeping about $57,000. Most of the money was won back by players.

Staff writer Matt Bittle can be reached at 741-8250 or mbittle@newszap.com. Follow @MatthewCBittle on Twitter.

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