Defining Insanity!

The Gambling Industry saturates the market, sucks discretionary income from local communities, then whines for tax cuts, never delivering the overstated promises.

Gone is the pretense of 'job creation' and phony revenue claims.

Lawmakers obsess about the monthly revenue claims, ignoring sensible fiscal policy or the damage wrought.  

REGION: Maryland chips away at Delaware's gambling revenue

Mar 6, 2013

Newly installed table games at the Hollywood Casino in Perryville, Md., will open for play Thursday. / ROBERT CRAIG/THE NEWS JOURNAL

WILMINGTON — Bright and early Thursday morning, gamblers at Hollywood Casino in Perryville, Md., will start cashing chips, tossing dice and playing cards in the venue’s new table game section, the first to open in the state since a November referendum legalizing the games.

Many of those players will be from Delaware, or they’ll be customers who might otherwise have taken their business to a casino in the First State – at least that’s what Hollywood’s owners hope.

For Delaware’s three racetrack-casinos, the launch of table games in Maryland is expected to be the latest in a series of gambling expansions in the region that have taken a slice out of their profits – and the state’s revenues.

Delaware’s tax receipts from gambling fell 6 percent in fiscal year 2012, and are down 6 percent to date in fiscal 2013. Last year the state reaped $269 million in lottery proceeds, $18 million less than the year before.

State gambling revenues are projected to fall a total of 12 percent this year before leveling off in 2014, according to the Delaware Economic and Financial Advisory Council. The dismal DEFAC estimates are based almost entirely on growing regional competition.

Hollywood Casino, located in Cecil County, will open about 20 table game stations on its floor at 8 a.m. Thursday. Delaware Park, just 30 miles north of Hollywood on I-95, is expected to see losses sooner than other casinos in the state.

“When Perryville opened their slot parlor, the first one to feel the biggest hit was Delaware Park,” said Ed Sutor, CEO of Dover Downs Hotel and Casino.

Executives from Delaware Park did not respond to calls seeking comment.

Pennsylvania is experiencing similiar [sic] declines. Gross revenue from slot machine play at the state’s 11 casinos was down 9.2 percent last month. The casinos generated $195.9 million in gross revenue from slots in February, down from $215.7 million during the same period the year before, according to Pennsylvania Gaming Control Board figures released this week.

The four casinos in the crowded Philadelphia market were down significantly as well. Parx Casino in Bensalem, Pa., and Harrah’s Philadelphia in Chester were down 11.5 percent and 12 percent, respectively, over the same period the year before. Sugarhouse Casino in Philadelphia was down 9.7 percent.

Since its first casino opened, Pennsylvania has seen rapid growth in its casino industry and it’s now the nation’s second-largest gambling market, behind Las Vegas. But the state is now facing increased competition from new or added gambling in Maryland, New York, Ohio and Delaware.

Hollywood Casino spokeswoman Jennifer Miglionico knows the regional gambling competition is fierce, which is why her company worked to get table games up and running quickly.

“Our focus is pulling any players that are currently leaving the state to play table games, going to Delaware, Pennsylvania, New Jersey,” she said. “That’s the intent, to bring new business.”

But Sutor said Perryville’s relatively small facility poses much less of a threat to Delaware venues than the launch of table games at the massive Maryland Live! casino south of Baltimore, scheduled for April 11.

“Our real concern is Maryland Live! They’ll have ten times as many tables [as Hollywood] in a market we heavily rely on for customers,” he said.

Hollywood has yet to recover from the hit it took when Maryland Live! opened in June of last year.

“When we opened, we were the first in the state,” Miglionico said. “The numbers we’re reporting show year-over-year we’ve seen a loss. That’s because Maryland Live! opened up.”

Even though table games will be the new draw, slots are casinos’ biggest moneymakers and are expected to see gains from the increased foot traffic brought by table games.

“Slots is still over 85 percent of the total revenues,” Sutor said. “It’s going to further dilute the pool of customers.”

Delaware casinos already are seeing their table-game dealers and supervisors hired away by Maryland casinos, Sutor added.

“They’ve been advertising locally. Who do you think they’re coming after, advertising in the local papers?” he said.

Casino operators can only guess at the impact of a new Harrah’s casino set to open in downtown Baltimore next year, or a new Maryland venue just outside Washington, D.C., approved by voters in the table games referendum and scheduled for completion in 2016.

However, the other casino on Delaware’s doorstep, Ocean Downs in Berlin, Md., does not have plans to add table games to its slots parlor – at least not yet. Ocean Downs and Delaware Park are both owned by William M. Rickman Jr.

Sutor said Delaware’s casinos have a chance to make up competitive ground with the launch of Internet gambling in the state later this year, but he doesn’t expect a huge windfall from the high-overhead venture.

The real strategy is to continue lobbying lawmakers for lower gambling tax rates, as the industry has done consistently in recent years, to limited effect.

“We’re hoping the Legislature and the administration will give us an opportunity as an industry to revisit the revenue sharing, because right now it’s not working,” Sutor said.

http://www.delmarvanow.com/article/20130306/NEWS01/130306004/REGION-Maryland-chips-away-Delaware-s-gambling-revenues

Government as Partner in Gambling Addiction

State Governments set the tax rate and structure for Expanded Gambling [by whatever name].

In this case? It seems every one's projections were wrong and the Gambling Business is losing money.

What other Business would expect to have its tax rate lowered because it made a flawed business decision? A tax rate to which they agreed when they obtained a license.

State Governments become partners in the promotion and success of Gambling Addiction. Somehow, our priorities are skewed.


Casino at Ocean Downs finishes first year of operation in the red
Share of earnings not high enough, owner says
Written by BRIAN SHANE Gannett

BERLIN, Md. -- Though the Casino at Ocean Downs generated nearly $45 million in its first year, the facility still finished 2011 in the red, according to its owner.

Owner William Rickman, who also owns Delaware Park, said the casino's 33 percent share of revenue, which came to about $14.8 million, was not enough to cover the building's operating expenses.

"Unfortunately, we did not do the business we thought we would do, nor what the state projected, nor what we projected, which led to fairly substantial losses for the company for the year," he said.

"I realize it seems like a lot of money, but we as the operators have to cover all those expenses," he said. "We're looking forward to maybe getting some help from the state, because the losses were large enough that they just can't go on indefinitely."

Rickman also said he hopes to work with state officials to lower the casino's tax rate, which by law claims two-thirds of its revenue. He said the level of taxation for what's essentially a seasonal operation "just doesn't work."

When asked if he could provide exact figures to show how much the casino was in the red, Rickman said he has yet to receive the final audit that would show those losses.

"I'm satisfied with the facility -- don't get me wrong, it turned out great -- I'd even like someday for it to grow. But you have to be in the black before you can do that," Rickman said.

According to figures released by the Maryland Lottery, the total revenue generated by Ocean Downs came to $44,927,696.06. That makes the casino, only a year old, a major cog in the county's economy. Its revenues are equal to half the county's entire annual operating budget.

Slots revenue swelled in the summer months, dipped in the shoulder season and stayed down in the winter. Monthly revenue peaked at $5.3 million in July -- a figure 14.3 percent higher than September, the second-busiest month.

The casino took in $3 million in December, the casino's least-busy month since its opening last January.

Ocean Downs provided local governments with $2.47 million in impact grants in 2011, according to the Maryland Lottery. That amount comes from a 5.5 percent tax on total Ocean Downs revenue. All casino taxes combined take 67 percent of its revenues.