The sale of Delmarva’s Ocean Downs racino by the Rickman family may revive long-running rumors that their other holding is for the sale.
The other Rickman property, Delaware Park, denied that the state’s only casino and thoroughbred track is for sale.
The companies that own the legendary Churchill Downs and Saratoga racinos agreed to the purchase of Rickmans’ Ocean Downs, located in Berlin, MD.
Rumors about Delaware Park, a property once owned by a member of the duPont family, being on the block have circulated for years as Delaware casinos faced increasingly stiff competition that has put strains on horse racing operations. It did not help that the General Assembly in 2009 sharply increased the state’s share of gaming revenue as a way to deal with a recession-related revenue crisis.
Seen as a temporary measure at the time, the higher take is now baked into the state’s revenue stream, even though it threatens the future of the racino industry.
Racinos have unsuccessfully sought relief, with northern Delaware legislators in Delaware Park’s backyard showing little enthusiasm.
And while gaming revenues have stabilized after steep declines in past years, the value of the state’s three casinos has clearly declined, with potential buyers content to bide their time.
As a privately owned company, Delaware Park does not release any financials. Harrington Raceway also does not release financial figures, even though it is tied to the Delaware State Fair, which has many ties to General Assembly members and others.
We do know that publicly traded Dover Downs Gaming and Entertainment is marginally profitable and has a stock market value of less than $35 million.
Delaware Park could be slightly more lucrative. Unlike Dover, Delaware Park did not invest in a destination casino, hotel and conference center. The track did own what is now the Sheraton hotel off I-95.
Delaware Park later sold the property to a veteran hotel operator that finally opened the site that had fallen victim to a dispute with the New Castle County.
The Capano family interests that had owned the hotel were accused by the county of misstating the square footage of the property.
Delaware Park also bought a surplus engineering building from New Castle County, which under an expansionary period under Executive Tom Gordon moved much of its office space into the more posh Corporate Commons area near New Castle.
Delaware Park does operate a golf course and is located on a prime piece of real estate. While pursues at the track have declined and the schedule has been trimmed back, there are no signs that operators plan to force the issue of revenue declines by closing the track.
The racing community remains nervous about the future as the industry struggles at many venues and might welcome an operator like Churchill.
Delaware Park does have a large “locals” market that is at least partially insulates it from competitors like the nearby Harrah’s Racino in Chester. That venue is beginning to struggle with competition from casinos without the overhead of a track.
The region is also close to the saturation point on casinos, with only the opening of a casino near the stadium complex in Philadelphia and the Las Vegas-style MGM venue near Washington, DC. currently in the pipeline.
That niche with the locals may be one reason to not pay too much attention to any rumors about the venerable track – at least in the short term.