Dover Downs Gaming & Entertainment, Inc. swung to a small loss in the first quarter as competition took a toll.
The loss came as Maryland Live, located in Dover Downs’ key market of Baltimore-Washington, emerged as the top slots destination in the region by a wide margin. With more than 4,000 slots, Maryland Live takes in more slots revenue than all three Delaware casinos combined.
Revenue for the first quarter of 2013 was $50,518,000 compared with $64,084,000 for the first quarter of 2012.
Gaming revenues were down 22.5% compared to the first quarter of 2012, primarily as a result of increased competition in the region.
Other operating revenues were down 7% compared to last year to $5,215,000 as fewer people stayed overnight. Occupancy levels in the Dover Downs Hotel were approximately 84% for the first quarter of 2013 compared with about 89% for the first quarter of 2012.
General and administrative expenses of $1,529,000 and depreciation expense of $2,509,000 were both down slightly compared to last year.
The net loss was $283,000 compared with net earnings of $2,371,000, or $.07 per diluted share for the first quarter of 2012.
Denis McGlynn, CEO stated: “We are continuing our dialogue with the lottery and the administration relative to a gaming tax structure and regulatory environment that is sustainable on a long-term basis. The gaming industry as a whole is a significant contributor to the state’s general fund, represents one of the larger employers in the state and is a critical component of the State’s tourism industry. A business model that addresses the current competitive environment is in the best interest of all stakeholders and this is the message we’re delivering as we continue our communications.”
“We continue to move forward on the iGaming front. The size of this new market and what it will mean to us financially remains to be seen, but judging from the response to the State’s RFP, there are a lot of iGaming providers extremely anxious to do business in Delaware. We are pleased to see that the State remains on its timetable and we expect to begin our first online offerings on or about the end of September.”
The state increased its cut of the action at Delaware casinos in closing a budget gap a few years ago. Since that time, the gaming industries in Maryland and Pennsylvania have expanded rapidly. Maryland has put further pressure on Delaware casinos by adding table games.
Dover Downs gaming operations consist of about 2,500 slots and a complement of table games including poker. The AAA-rated Four Diamond hotel is Delaware’s largest with 500 luxurious rooms/suites and amenities including a full-service spa/salon, concert hall and 41,500 square feet of multi-use event space.
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