A state commission narrowly voted to back a new casino rescue plan with a $45.8 million cost, with one Sussex County legislator taking issue with the term “bailout.”
The Associated Press reported the commission approved the plan by a 5-4 vote. The group has been working on the issue for two years as tight state budget have limited options.
The gaming industry has seen a sharp drop in revenues during the past decade as the Mid-Atlantic region added many new casinos in Pennsylvania and Maryland.
A recession and a decision by the General Assembly and the Markell administration in 2009 to up the state’s take from casinos seems to have moved the venues into the red.
Recommendations from the Lottery and Gaming Study Commission seek to end a licensing fee for table games, cut the table game tax rate in half and have the state shoulder all video lottery vendor costs, WDDE reported. Another controversial provision would provide a tax credit for marketing expenses, a move that could run in the tens of millions of dollars.
Finance Secretary and commission chair Tom Cook opposes the plan, saying this isn’t the only solution, WDDE reported. “If this were an easy issue to solve then they would’ve solved it in Atlantic City, we wouldn’t have had to have met for two years. I’m sure there will be subsequent discussions,” said Cook.The Markell Administration opposes the deal.
One legislator attacked media reports on the panel’s action:
State Rep. Tim Dukes, R-Laurel, who voted in favor of the package, said helping to maintain the casinos preserves the state’s sixth largest source of revenue — money that would otherwise be coming out of the pocket of taxpayers.
“Many media outlets have done a disservice to the people they have a duty to inform by repeatedly misreporting efforts to reduce the burden on the casinos as a ‘bailout,’ he stated in a newsletter by the House Republican Caucus. “It’s a reduction in the taxes and fees they are paying the state.
“If you’re paying $200 a year in state taxes, and you get a $50 tax cut, you’re still sending $150 to the state every year,” Rep. Dukes said. “So when you’re writing that check to the taxman, do you feel like you’ve been bailed out?”
State Sen. Brian Pettyjohn, R-Georgetown, says he has problems with some parts of the plan, including the marketing piece, but added that Delaware “can’t just keep squeezing the neck of the golden goose. Pretty soon it’s going to stop laying eggs and die on us.”.
So far, support for helping the casinos seems to be centered in central and southern Delaware, with a number of legislators north of the canal opposed to a large bailout package.
Critics have claimed casinos, which have not made their finances public, may suffer from problems that go beyond the state’s piece of the action. Dover Downs Gaming and Entertainment does release financial information, since its stock is publicly traded.
Dover Downs has reported losses from operations.
New Castle County has one casino at Delaware Park.
Any financial package with a large price tag would force spending cuts that would be politically unpopular. Budgets that might face cuts would come in areas such as education and health care for the poor (Medicaid).
Click on the link below for the full story from WDDE: State commission backs casino bailout plan
