Legislation that would provide some relief for the struggling casino industry in Delaware made its way out of the State Senate.
Senate Bill 144 passed the Senate by a 17-3 vote with one abstention. The bill, if passed in its current form would:
- Cut the state’s share of gross table game revenues from 29.4% to 15.5%.
- Suspends the table game license fee due June 1, 2019, and continues to suspend the fee in subsequent fiscal years if each agent increases expenditures on marketing, wages, and benefits by its share of the license fee.
- Increases purses for horsemen by 0.6%, phased-in over two years.
- Reduces the state’s share of gross slot machine revenues from 43.5 percent to 41.5 percent or 42.5 percent to 40.5 percent , as applicable, with additional reductions of 2 percent possible for each video lottery agent starting with the fiscal year beginning July 1, 2019, based on qualified capital expenditures reaching 3 percent of video lottery net proceeds.
- The Substitute Act also removes the prohibition against video lottery agents operating on Christmas or Easter.
The state’s revenue sharing “take” of gaming proceeds moved from one of the lowest to one of the highest in the nation after the state faced a revenue crisis in 2009. As the economy improved, state finances did not and the high “take” remained in effect.
The bill does face a cloudier future in the House, where Speaker Pete Schwartzkopf expressed reservations in an interview with the Delaware State News.
Meanwhile, Maryland and Pennsylvania have aggressively added casinos. Maryland now has a Las Vegas-style MGM casino across the river from Washington, D.C., at one time a market for the Dover Downs hotel and casino.
Investment is also flowing into Atlantic City after the closing of casinos in recent years. The Hard Rock chain this summer will reopen a hotel-casino at the former Trump Taj Mahal.
The state has seen a slight boost in revenue projections this year that has made for a stronger case by those seeking the relief package.
State Sen. Brian Bushweller, D-Dover, has pushed for the legislation. Kent County has two of state’s three “racinos” that combine horse racing and casinos. Revenues from racing have been falling along with gaming revenues.
The marketing requirement in the legislation is in response to long-running concerns among legislators that Delaware Park and other venues failed to make needed investments in its expansive site in northern Delaware as competition intensified.
The Rickman family never built a detached casino at Delaware Park and for a time owned a small horse track and casino near Ocean City that competed for Delaware business. The track was later sold.
Dover Downs did invest in a large hotel and meeting center at its location. The state’s other casino is at the State Fair site in Harrington.
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