Delaware: Racinos whine about costs

Before the ink is dry, the Gambling Vultures already know how they're going to re-negotiate the terms for their false promises.

The Vultures promise to 'save the state,' 'save racing,' fund teachers and then expect taxpayers to pick up the tab when they've sucked limited discretionary dollars from the local economy.

Something for Nothing didn't work before. What makes us think it will work now?

Delaware racinos ask for relief from fees on table games
Gov. 'not inclined to push for changes'
By JEFF MONTGOMERY • The News Journal • October 13, 2010

Delaware's three racinos called for relief Tuesday from millions in state fees for table game licenses, citing high employee costs and growing competition from new gambling centers in Pennsylvania and Maryland.

Dover Downs Chief Executive Ed Sutor said that combined fees of up to $13.5 million yearly add costs to a gaming area already squeezed by high payrolls and modest patronage.

"Unfortunately, we're not getting the revenues from table games that were originally projected a year and a half ago," Sutor said during a meeting of the state's Video Lottery Advisory Council.

[Translation: Our phony promises caught up with us! Now bail us out!]


"Harrington is losing money on table games because of the high tax rate and the large payroll that comes with table games," Sutor said. "It has pushed Dover Downs into the loss column."

Andrew Gentile, vice president at Delaware Park, said that the Stanton-area racino had nearly met revenue forecasts for the third quarter, but payroll costs surged as nearby casino openings bid up the wages of supervisors.

[Translation: We don't have as many low wage jobs as we promised! We're losing money by being forced to pay living wages!]

Delaware Park's slot machine revenues, meanwhile, plummeted by 18 percent immediately after the opening of the new Hollywood Casino in Perryville, Md., Gentile said.

Brian Selander, chief spokesman for Gov. Jack Markell, said Tuesday that the casinos were aware of the competitive environment when they launched their table game ventures.

"Given that these funds help pay for critical expenses like teacher and state police salaries, the governor is not inclined to push for changes in this agreement," Selander said.

"The racinos were actively involved in negotiating these costs as part of the launch of table games here. They knew there was competition coming from nearby states and they knew they would need to live with this agreement," Selander said.

Casinos lobbied heavily for table games in 2008 and 2009, largely as an attraction that would keep patrons coming despite competition in neighboring states. The same argument was used in debates over adding sports betting to casino offerings.

A lawsuit filed by sports leagues, however, led to an appeals court ruling that limited sports wagering to the pro football season, and Sutor said that the addition of table games "is not doing nearly what we thought it would do."

Gambling taxes and fees are the state's fourth-largest revenue source after personal income taxes, business franchise taxes and collection of unclaimed assets. Delaware's revenue forecasters estimated last month that the lottery and casinos would generate $254.8 million in the current budget year, down from $275.5 million the previous year.

Those revenues are expected to fall again in 2012, to $235.9 million, before beginning a recovery in 2013.

Although Sutor asked the full state advisory council to support the fee-relief recommendation, Lottery Director Wayne Lemons objected. Lemons said the casinos should make the request a separate addition to the council's regular report.

Lemons also balked at a proposal for official council support of changes that would allow alcohol consumption at state casinos during all operating hours, and gaming on Christmas and Easter.

[Translation: This is what we want. This is what we're going to get! So there!]

"That's something we cannot do without legislative approval and, as you know, there will be considerable legislative push-back to do it," Lemons said. "Just make it clear that it's a track recommendation."

Harrington Raceway Chief Executive Patti Key said afterward that the regional casino scramble could become more intense with the planned opening of a center at Ocean Downs in Maryland and proposals for casinos in Baltimore and Hanover, Md.

"If they open in Baltimore and Arundel Mills, that's going to be crushing for Harrington and Dover Downs," Sutor said.