The legislation now moves on to the House of Representatives.
Legislation passed by the state Senate April 27 would deliver a significant reduction in Delaware’s take from the gaming revenues of Delaware’s three racinos – including Kent County’s second-largest private employer, Dover Downs.
Senate Substitute 1 for Senate Bill 144was released from the Senate Finance Committee Wednesday following lengthy negotiations between legislators, the executive branch, and employers from the casino industry. The Senate passed the legislation 17-3 this afternoon.
Prime sponsor Sen. Brian Bushweller, D-Dover, hailed the legislation as a shot in the arm for Delaware’s economy.
“For 12 years, my highest legislative priority has been restructuring the financial relationship between Delaware and our casino industry,” Bushweller said. “That relationship has been out of whack for years, to the peril of more than 4,000 jobs.
“It’s immensely gratifying to me that we’ve reached this milestone, and not a moment too soon: state government has treated the casino industry like a cash cow for decades, and that cow has been milked nearly dry. We still have to get the bill through the House, but this is a great day for the racinos and for all of their employees.”
Industry leaders also applauded the legislation as a sorely needed rebalancing of the state’s unique relationship with casinos.
“This legislation will allow Dover Downs to improve our property and continue to maintain our great workforce,” Denis McGlynn, president and CEO of Dover Downs said. “Although we had requested greater relief, we appreciate the spirit of everyone working together to reach this compromise. We especially appreciate the reinvigoration of our partnership with the state, and look forward to passage in the House and Senate, and signature by Gov. Carney.”
Delaware’s casino industry has faced growing economic headwinds in recent years, including competition from neighboring states and increasing costs of doing business. While Delaware’s casinos remain operationally profitable, they are subject to an outdated revenue sharing formula, on top of taxes and fees that apply to other businesses, Bushweller’s office said in a press released.
Those additional costs have undermined casinos’ ability to stay in the black: Dover Downs alone, which directly employs roughly 1,400 people, reported a net loss of nearly $1 million in 2017, despite earning $147 million in gaming revenue and $74 in net operating profit in the same period.
If signed into law, SS for SB 144 would:
- Reduce the state’s share of gross table game revenues from 29.4 percent to 15.5 percent
Suspend the table game license fee due in June 2019.
- Phase in over two years a 0.6 percent increase in purses for horsemen.
- Reduce the state’s share of gross slot machine revenues by two percentage points.
- Remove the prohibition against video lottery agents operating on Christmas and Easter.
The bill also includes a framework for some provisions, including the table game license suspension, to be extended in subsequent fiscal years if agents meet certain requirements.
SS 1 for SB 144 now goes to the House for consideration.