A casino industry group representing the Dover Downs, Delaware Park and Harrington casinos, in Delaware, has reached out to state lawmakers in a desperate bid for help, as they struggle to compete with the competition from nearby states.
The news emanating from the recent Video Lottery Advisory Council meeting in Delaware is a clear ‘HELP US’ signal by representatives of the states big three racinos.
The 30 Oct 2014 meeting, held at Dover Downs Casino, saw casino chiefs asking for the introduction of a tiered rate structure and revised tax rate on table games, as the state continues to stumble.
The tiered rating system is one that creates payments based on revenue fluctuation so if the casino is doing well, then the rate is high; and when the casino is struggling, the rate is lower.
Speaking to CNBC, Ed Sutor, CEO of Dover Downs and chairman of the Video Lottery Advisory Council, believes the tiered rate structure is crucial if Delaware’s casinos are able to compete with the business from neighboring states.
The high rate of tax was also an issue that was slapped on the agenda with a big fat Sharpie. The current tax rate, on table games, is close to 40% and representatives of the big three would like to see that nearer to 15%.
“Delaware by far has the highest table game tax rate in the country,” Sutor was reported to have told council members.
The group also wants the state to help with paying all vendor fees for slot machines before revenue is distributed. The state currently contributes to just 75% of slot machine vendor fees. The casino also asked the state to provide financial support for capital expenditure and marketing initiatives.
News reports suggested the council would finalize their recommendations before submitting them to the state sometime next week.
Revenues the Lowest in 2014
The meeting was held just days after Delaware Lottery released the bad news that their September iGaming results were the lowest of the year.
It was the second straight month that iGaming revenue had dipped in Delaware and it was the lack of revenue from their table game action that seemed to be the main culprit amongst a whole host of nasty looking numbers.