Zombie Casino Alert! Part IV (Studying Our Failures Episode)
The end of this legislative session finds Delaware taxpayers footing an $8M bill to help the local casinos pay the increased costs of their equipment providers who are apparently paid with a percentage of the casino’s profits. Casinos now pay those vendors 6% of the profits for equipment and machines and expect to pay 10% after these contracts are re-upped. In addition, Epilogue language provided for a new Lottery and Gaming Study Commission
to study the viability of the First State’s gambling industry, including the taxes the racinos pay the state to operate.
Think about that for a minute. We are “studying” the taxes the racinos pay, we are sending them $8M to cover their increased costs, we didn’t get a no layoffs promise in return for that money. This after we spent money on a study commissioned by the DE Sports and Video Lottery Commission to take a look at the competitive field if we added two more casinos, and then promptly rejected the conclusions of that study — which recommended adding two new venues. The Governor and the GA knew then (2010) that the casinos were facing serious challenges. And we knew that they were dead wrong then, and now that all of these new venues in PA and MD have come on line (and come online like gangbusters), the threat is suddenly here.
As the DE Sports and Video Lottery Commission signaled back in 2010, they won’t be concerned with the long-term viability and competitiveness of this industry — but they will be invested in making sure that the current crop of owners get paid. So as you look at this going forward, we are specifically looking at your government protecting the interests of a very few people. I’m amused to recall that in the aftermath of the Kinder Morgan leaving the state that the Governor accused the people who opposed this deal as not knowing much about business. Because a business that didn’t have the chance at taxpayer monies making their balance sheets whole, would have been investing in where they could be competitive and cutting the strings on those venues that had no long term viability.
Instead of working on better competition, the Governor and the GA are working out a path to decrease the taxes they earn from these operations. Notice that it is a given that the vendors whose take goes from 6% to 10% won’t be giving back anything. Layoffs from casinos are not off of the table. The state taking less money — and still not being able to give their own workers a raise — is the only solution that seems to be on the table.
These casinos have a much bigger problem than state taxes. They’re customer base has been eroded due to other venues in PA and MD, and I can’t figure out what they’ve done to try to cultivate a different customer base (much less energize their old customer base), but I can tell that they’ve spent alot of time persuading the Governor and the GA that they are Too Big to Fail. Maybe everyone is trying to stay in a holding pattern until Internet Gambling comes on line. Is online gambling a savior? I don’t know. But if they are waiting for that, they should condition any cut in taxes with an expectation that taxes go right back up when this comes online.
Zombie Casino Alert
Zombie Casino Alert, Part II
Zombie Casino Alert, Part III
Tags: Delaware Casinos, Featured
Hmmm… Sounds a lot like Horse Race gambling, originally a license to print money that became a money losing liability. Face it, this cash cow is on life support and will not be getting any better. As for employment how about we try to generate real jobs that don’t depend on a gimmick, a racket or legalizing something every other state has banned.
With a “business friendly” Governor and legislature the only constraint on casino owners abity to shove public money in thier pockets is thier arm strength and cardio fitness
It was obvious a while ago that the market in the mid-atlantic was over developed but more casinos were still built. I see no reason to support the gambling industry.
What about a cost -benefit analysis study comparing the amount pf profits generated by casinos and taxes paid to the state. I know the governor has an Economics degree from Univ. of Chicago-the home of free markets and competition….but for whom??? How does this work? I’m just thinking aloud.
“Face it, this cash cow is on life support and will not be getting any better.”
I don’t know where this canard came from. Last fiscal year generated $193 million for the state. The whining about how bad business is comes from investors looking for growth, which will not happen. So what? That’s not the state’s problem, and neither are the layoffs. The shrinkage won’t last forever, and if the casinos’ stats about players are accurate, the state’s rake won’t drop below about $130-$140 million.
That said, there’s no reason for the state government to pin all its slots revenue on just three casinos. One in Sussex accessible from the beaches would certainly steal business from Ocean Downs, and one near the Pa. border would reclaim some business from the Harrah’s in Chester. That would not reverse but would help slow the losses.
honestly, not different at all than servicing 8% of the state’s kids with amplified protections for charter schools with negligible accountability.
@ geezer
Just where in Sussex would you build that casino? Why would you build another venue, when we the tax payers just wrote that check to support the other 3? This is the same old tired rhetoric that everyone is sick of. We need and want desperately, sustainable long-term employment for a healthy middle class. NOT more menial, transitory service positions, reliant on tips. I do not have the answer to our current problems, but sane people understand that adding another gambling venue is not the answer,
Not the answer to what? If you want to keep casino revenue higher, you allow more casinos. That’s what’s happening in the other states. They didn’t limit their casinos to existing racetracks, and we shouldn’t either.
“We” didn’t write a check — the General Assembly, where most lawmakers are in the pockets of one or another of the existing locations, did that. Breaking up the oligarchy will lessen their political power, putting a stop to their control of the GA.
Casino jobs vs. other jobs is not an either/or proposition, so that point is hollow.
Where? What’s wrong with Millsboro? The point is to tap into a tourist market that currently can drive to Ocean Downs in Berlin, Md.
How do you propose Millsboros polluted water supply and failing sewage plant support that? Do you support the Millsboro bypass? Nice try on the jobs thing. Service positions are and will not support anything except the payment of wages at a sub poverty level. And yes we the taxpayers in this state are going to have to pay for the check that the legislature approved, as well as the infrastructure to support a venue in Sussex, and the subsequent havoc it will create. The SOD should not be trying to trap tourists into gambling here. We have a lot to offer in other forms of entertainment and recreation besides gambling. A fiscally responsible government should not have to continue to create ever increasing forms of revenue to pay for its own miss steps in regard to spending.
“How do you propose Millsboros polluted water supply and failing sewage plant support that? ”
I have no idea, and if I’m the developer, it’s not my problem.
“Do you support the Millsboro bypass?”
Not on its current route, no. It should be located to the west, not the east, of existing 113.
“Nice try on the jobs thing. Service positions are and will not support anything except the payment of wages at a sub poverty level.”
So what? So we should eliminate such jobs? What do people make at the existing casinos? Should we cheer their layoffs because the jobs are low-wage?
“And yes we the taxpayers in this state are going to have to pay for the check ”
No we aren’t. The reason we paid it this time is because the three existing casinos have, among the three of them, a majority of the lawmakers in their pockets. Dilute their power and they won’t control the General Assembly so well. I’m sorry if this concept is beyond your comprehension, but that’s not my problem, it’s yours.
“as well as the infrastructure to support a venue in Sussex, and the subsequent havoc it will create.”
What you call “havoc” is what the rest of Sussex County calls “business.” Your county council has allowed every housing development ever proposed; don’t whine about it now. Or are you no longer a free-market acolyte?
“The SOD should not be trying to trap tourists into gambling here.”
Trapping? Ever hear of free will? Personal responsibility? C;mon, I recognize your name from DP. Are all those conservative nostrums suddenly out the window?
“We have a lot to offer in other forms of entertainment and recreation besides gambling.”
Again, so much for personal freedom. You’re just another bluenose, condemning people for pursuing forms of recreation of which you don’t approve.
“A fiscally responsible government should not have to continue to create ever increasing forms of revenue to pay for its own miss steps in regard to spending.”
In case you have forgotten the topic, we’re talking about falling casino revenue to the state. One obvious solution to boost casino revenue is to build more casinos.
You have also revealed that you know nothing about the state’s fiscal picture. The increases in spending are mostly related to Medicaid.
Sane people, by the way, are those who don’t start with the desired outcome and work their way backwards to construct their case.
If gambling is legal in Delaware, there is no reason to restrict it to three locations.
Well it did not take you long to resort to the name calling/labeling cause there is a opposeing view-point. The fact remains that the citizens in Sussex County do not support a casino being built. Blaming the Council is a cheap excuse for flying in the face of what people want and do not want. If what you believe about the legality of gaming in SOD is true, then we should build one on every corner, kill horse racing and let the free market take over??? Quite a leap for you to admit free market is the solution to SOD money trouble.
You don’t have anything to prove your contention that “the people” don’t want it. You mean that you don’t want it. And don’t get in a snip because you’re the one being hoist on your own petard.
I don’t care for gambling myself, but I’m not hypocritical enough to allow a state-supported oligarchy to shut out legitimate competition.
As for “one on every corner,” who said that? You can only argue against it by distorting a point of view that opposes your own into a cartoon.
Look at how the other states that are out-competing us have done it. They haven’t put one on every corner, but they haven’t limited the outlets to racetracks — despite the fact that those states, too, adopted gambling to help the racetracks.
Face it, hypocrite — you’ve got no leg to stand on except your own preferences. Typical “conservative.”
“The fact remains that the citizens in Sussex County do not support a casino being built”
To be honest, I sort of don’t care. If it were right next door to me, no way! Out there in Millsboro, well considering Millsboro, a casino could be welcome addition. But for those who oppose it, their opposition seems to be less on capitalistic/economic grounds than it is on moralistic grounds.
The removal of tempation, does not a holy person make. Real personal (and moral) values hold fast in the face of temptation. If people find entertainment in gambling and gambling in DE is legal then to each their own.
I suppose it’s inconvenient when economic principles conflict with moral principles.
There was an effort to build a new racino and “lifestyle park” in the Millsboro area that seemed to fritter out last year. I doubt that it is true that most Sussex countians opposed it, but it did get stopped by the Governor and GA’s successful effort to protect the current three casinos.
In Sussex we are represented by elected officials. Not one of them, not even the speaker of the house, could survive a re-election by supporting the construction of a racino-family casino, ect in their district. The reasons people oppose the construction are as varied as the fabric in Sussex, and it is not a conservative conspiracy, or right-wing attempt at assimilation as some here would have you believe.
The speaker of the house did not support the construction in his district, rather he wanted it in mine. It has become a location ” hot potato ” with Sussex hopefully being left off any new list for location.
What Millsboro is getting is a new golf planned community, a water park, and associated businesses to go with it. Those projects were supported, a racino was not. I believe that Sussex is trying to exclude the construction of the racino for a lot of reasons, 1 primary reason being the inherent corruption and grafting that would surround the project from start to finnish, and continue on through its operation.
The Speaker of the House supported the construction of this racino where the planned developers wanted it. It isn’t as though he picked the site. I don’t have a horse in this race — except to point out as a taxpayer that throwing money at these casinos in an effort to prop them up isn’t nearly as smart as opening up venues and letting the marketplace work is. Opening up more competition in more competitive geographies probably won’t preserve the revenue levels they’ve been getting, but they have a better chance at longer term survival.
And that’s all I was saying. I don’t support gambling either. But to pretend that a casino is the one sort of development that should be off-limits goes against everything the free-market yahoos claim to believe — showing that they only believe it when their backyards are not involved.
” I don’t have a horse in this race ” If that was intended, it was a good one! We are closer together than we all think. No one wants to continue to prop up the failing horse racing industry with another failing industry that needs propping up. The SOD will never let its strangle hold on the racinos loose, so the free enterprise notion is a non starter. Nobody is pretending either. The thought of a casino in Sussex just flies in the face of what central and western Sussex residents are trying to preserve, a way of life. It is not controvercial or political it is just the way the wind is blowing. As to the speaker of the house, when it was suggested that the developer seek a location in eastern Sussex that allready had the infrastructure and tourist population that they sought, it was rebuked roughly, off the record, or so it was reported. That gave the impression of the ” location hot potato “. In closing my position is:
1. let the horse racing industry live or die of its own will
2. let the casino/racinos live or die of their own will
3. let anyone who wants to build another casino to live or die of its own will, hopefully not in central or western Sussex.
“No one wants to continue to prop up the failing horse racing industry with another failing industry that needs propping up.”
Now you have revealed that you don’t even understand business. It’s not the horse racing industry, it’s the slots industry. And if it needed propping up, nobody would be seeking to build the new casinos. Dover Downs crying poor-mouth and getting this handout could be the very thing that galvanizes the public against the oligarchy.
A normal business that overexpands retains profitability by cutting costs, which is exactly what the casinos will have to do — if not this year, then soon.
“The SOD will never let its strangle hold on the racinos loose, so the free enterprise notion is a non starter.”
Bullshit. You can say that about any issue, and it’s never true unless you lay down and surrender. Anyway, I think you have the stranglehold going in the wrong direction.
“The thought of a casino in Sussex just flies in the face of what central and western Sussex residents are trying to preserve, a way of life.”
Millsboro is not “central” Sussex. It’s part of the beach sprawl, where the “way of life” is sitting in traffic. As I said before, nobody did much to stop the rest of that sprawl. They’re only whining now because it’s getting closer to them. They didn’t give a shit about preserving a way of life for the people around the Indian River Bay.
Your howl is the perpetual howl of “NIMBY.”
“When it was suggested that the developer seek a location in eastern Sussex that allready had the infrastructure and tourist population that they sought, it was rebuked roughly, off the record, or so it was reported. That gave the impression of the ” location hot potato “.
So interesting to hear you freedom-loving conservatives dictating to people where they should locate their businesses. Hypocrite.