Slot machine net proceeds information from the Delaware Lottery indicates the two Kent County casinos are taking the brunt of the competition in an increasingly saturated gaming market in the region.
During the first five months of the year, slots (formally known as video lottery terminals) posted net proceeds of nearly $144 million in 2015, compared to nearly $150 million a year ago during the same period.
The slot machines are owned by the Delaware Lottery. Net proceeds refers to the difference between the amount of total revenues and the amount won by players.
Kent County’s Dover Downs, which operates the state’s only “destination casino,” with a hotel, shops and conference center, saw slots proceeds drop about $4 million from the same period a year earlier to $52 million.
Delaware Park’s slots revenues were flat from a year ago at nearly $56 million. Also in Kent, Harrington Raceway’s revenues were down about $600,000 in the six month period to $34.2 million.
Sussex County has no casinos, although Rickman family, owner of Delaware Park, opened a venue a short drive from some areas of the county at a location near Ocean City, MD.. The figures from the Delaware Lottery represent only part of the financial picture, since the state’s three casinos also have table games and operate horse tracks.
Legislators, facing a budget gap, did not offer any relief to the struggling industry in the past sessions, after coming up with millions of dollar during the previous two years.
The end of boom times for casinos came in the 2000s, as Pennsylvania aggressively added casinos, followed by Maryland..
In Delaware, the squeeze on casino earnings became more pronounced in 2009 when the state’s take on casino winnings went from one of the lowest to one of the highest percentages in the nation.
In the meantime, Maryland has been generous in handing out casino licenses, with a Las Vegas-style MGM casino across the Potomac from Washington, D.C. slated to open next year. This is in addition to two large casinos that have in the Baltimore area in recent years.
In Pennsylvania, approval has been given to casino in south Philadelphia near the sports complex, , a short drive from much of north Wilmington.
The looming opening could mean that Delaware casinos may not have “hit bottom” in dealing with a decline in proceeds.
The expansion in Maryland has affected the Hollywood Casino in Perryville, MD., Maryland’s first slots venue. Hollywood has reduced the number of slot machines it operates as net proceeds declined. The number of Delaware video lottery terminals has remained steady at about 6,500.
A commission studying the issue in Delaware came up with recommendations for aiding the industry. However, the panel remained split on the course of action.
Downstate legislators, worried about the loss of jobs, pressed for a more aggressive bailout plan.
Northern Delaware legislators and other industry critics have been less inclined to give casinos a break, with some claiming the venues squandered their riches during the boom times. Unlike neighboring states, Delaware did not seek up-front fees for opening casinos.
Casinos have been successful in efforts to shield their financial information from public view during reviews of their operations.
However, Dover Downs, the only publicly traded company operating a casino in the state, has reported small losses.
The stock price of the company also fell below $1 a share, promoting a notice from the New York Stock Exchange. The one-casino company has to submit a plan aimed at getting the stock price above the $1 minimum.
