The merger of Dover Downs Gaming & Entertainment, Inc. with a Rhode Island-based casino operator will face scrutiny from the State of Delaware.
In approving the merger, the state is likely to seek reassurances that Twin River Worldwide Holdings will retain harness racing at the track and employees among other things.
Dover Downs and Twin River Worldwide Holdings, Inc. announced that they had entered into a definitive merger agreement for a stock swap that would make the regional operator into a publicly traded company.
The State departments of Finance and Agriculture issued the following statement:
“The proposed transaction is subject to a variety of federal and state regulatory approvals and is expected to close in either the last quarter of 2018 or first quarter of 2019. The state will review the transaction to ensure it is consistent with Delaware law. Dover Downs is a major employer in Kent County, an important venue for our harness racing industry, and a key partner with the Delaware Lottery. We look forward to learning more about the details of the proposed transaction in the weeks and months ahead.”
It was also not immediately know how the merger would affect sister company Dover Motorsports, which operates two NASCAR weekends at a track in the Dover Downs complex.
The two companies share management functions. A planned merger was scrubbed several years ago, due to opposition from shareholders. Dover Motorsports is profitable.
Gov. John Carney had no immediate comment on the merger.
The merger comes after the General Assembly agreed to concessions on revenue sharing for the state’s three “racinos” that combine gaming with horse racing.
The package was the result of a compromise with House Speaker Peter Schwartzkopf, who was skeptical of any bailout that would reduce state revenues.
Delaware has among the highest “revenue sharing” formulas in the nation. Dover Downs had been losing money and it was not clear that the new formula would move the company into the black.
Critics claimed the company was partially to blame for its plight, due to a decision to not compete for casino licenses in nearby Maryland and Pennsylvania and undertaking an expansion of its hotel-conference center, the largest in Delaware.
The decision not to expand came after the death of company founder John Rollins in 2000. Heirs have sold off holdings and stakes in publicly traded companies he started.
(See link to earlier story).
