Q3 profits up at Dover Downs

DOVER — Dover Downs made $826,000 in profits from June 1 to Sept. 30, the company reported Thursday. That marks a slight increase from $699,000 in the third quarter of 2014.

For the year, the company has pulled in about $1.1 million in net earnings, versus a loss of $190,000 through Sept. 30, 2014.

Dover Downs had total revenues of about $47.2 million the third quarter this year, down about $800,000 from the third quarter of 2014. However, expenses are down about $600,000, as the company has worked to cut back operations when possible.

For the year, expenses are about $4.2 million less than in the first nine months of 2014, meaning the company has been able to make a small profit even as gaming revenues fall.

Dover Downs cut 72 positions through the first six months of 2015.

Despite the struggles, hotel occupancy remains strong at 92 percent, Senior Vice President of Finance Timothy Horne said.

“We derive almost 41 percent casino revenue from hotel guests, which is an all-time high,” he said.

The casino saw some stability this past quarter, the result of lower gas prices and no new casino opening nearby in more than a year. However, that is set to change. MGM National Harbor is scheduled to start doing business next fall in Maryland’s Prince George’s County, and SugarHouse Casino in Philadelphia is undergoing an expansion.

Denis McGlynn

Denis McGlynn

Debt was reduced about $1.2 million in the quarter, down to $33.7 million. It is due Sept. 30, 2016.
Casino officials continue to push for legislative relief, namely in the form of a change to the revenue-sharing model. Currently, the casinos keep about 40 percent of slot proceeds, with the rest going to the state, the horsemen and the slot vendors.

Efforts to revamp the casino tax structure and provide additional aid failed in the Legislature this year, dying an early death.

Nonetheless, executives remain hopeful and have stressed they have spoken to a number of lawmakers who support the reform efforts.

“We’re going to be tested for a while going forward and that’s why we have to continue to impress on the Legislature why we have to adjust the revenue sharing formula so we can deal with this,” said Denis McGlynn, president and CEO of both Dover Motorsports and Dover Downs Gaming and Entertainment.

Dover Motorsports also released its quarterly earnings Thursday, but it had little to report. Because the fall NASCAR race was held in October rather than September for just the third time ever, the company saw practically negligible results from June 1 to Sept. 30.

The race being in the fourth quarter did slightly boost casino play for the third period but also figures to negatively impact the fourth quarter slot figures.

Motorsports revenue totaled $133,000 for the past three months, down from $21 million over the same period last year.

“Well, clearly quarterly comparisons are irrelevant this year,” Mr. McGlynn said.

While the fourth quarter figures to see much greater profits than usual, overall attendance was down due to heavy rain and the threat of a hurricane, with some purchased tickets not being used. TV ratings and online metrics do remain strong, as does sponsorship, officials said.

This year is shaping up to be stronger than 2014, when Dover Downs lost $706,000, but executives continue to insist only changes made by the Legislature will solidify their situation long-term.

“It all comes down to the politics in the end, and that’s something you just can’t predict,” Mr. McGlynn said.

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