The Delaware Racetrack Protection Racket
The effort to bring two new casinos (HB 40) to Delaware was voted down in the House Gaming & Parimutuels Committee on a 6-5 vote.
My usual disclaimer is basically the point of this post — I don’t much care about a casino industry here in Delaware and I am especially opposed to relying on it for State operation revenue. Especially since the legislature is perfectly willing to protect venues destined to go into decline as they have to compete with other venues in MD and PA, when they *should* be in the business of encouraging competition. More competition will help the state hold on to more of that revenue for a longer period of time — although very likely at the risk of downsisizing some of the existing venues.
What I definitely don’t want to see is any of the current venues decline enough to be able to flex their checkbooks to leverage Delaware taxpayer dollars to prop them up any more than they have been. And as long as this Committee has doubled down on the status quo, they’ve quite firmly closed the door on a long term competitive solution. The executives of the current venues are already complaining about reduced revenues at their venues, using that to claim that the current market is saturated. Not quite sure how they decided that their problem is market saturation, but any Legislators that just buy that as a protectionist excuse are kicking the real can of problems down the road. And I want to go on record now as being against any effort to bail out these venues when the inevitable happens. If legislators are in the business of protecting anything, it ought to be protecting a revenue stream — NOT the specific venues.
Apparently this will come back up in an effort to get a full vote by the House. If it does, I’m hoping that Delawareans will tell their legislators that they should not be standing in the way of competition for these venues and let the most competitive survive.
Tags: Delaware Casinos
As a believer in free market enterprise, I’m on your side Cassandra. I think the current venues might want to revisit their progression of logic when it comes to market saturation. Simply identifying decreased revenues at one’s venue does not produce verifiable data that supports a claim of vendor-specific market saturation. Perhaps a business course or two might be appropriate for these individuals.
Indeed, the evidence indicates that gambling activity increases with proximity to a casino: As Pa. and Md. casinos have come on line, the take has diminished in Atlantic City, but the total take of all casinos in the region has increased every time new locations have opened. There is every reason to think that gamblers who live closer to Millsboro than to Berlin, Md., would visit DelPointe rather than Ocean Downs.
What’s fun is watching all the social-issue conservatives at DP scurry about trying to explain why their free-market principles aren’t being violated by their calls to limit gambling to the three existing locations.
yeah. Free market solutions. I read something about solutions awhile back. I remember it as being “final”; but hey, that’s what DP is all about.
This is a great post, Cassandra.
More venues would indeed mean more gambling. That’s good news for state revenues, but bad news for our community in general.
Gambling is an overall negative in a community.
During the campaign, I came out against more venues. In good conscience, I could not stand on someone’s front porch and say that gambling is a good thing.
Cass, what are the reasons why the Delaware casinos are losing business?
They are not loosing business –
http://www.delawareonline.com/apps/pbcs.dll/article?AID=2011103180363
Jim, the only thing I went by were statements in the article by casino folks that they are losing customers and downsizing machines. Even the article Aoine links to has the operators noting that while the state’s revenues were up, the casinos’ revenues are down. I don’t have any first hand data about their condition. But I suspect that part of the answer of why revenues might be down have to do with the Great Recession and with competition from Perryville and PA.
But I do know that if the state wants to keep this revenue stream, it needs to be cognizant of the competition from other places. If they protect the current venues from competition NOW, by the time they know that they need a different mix of venues to maintain revenue, it will be way too late to do anything about that. Because that market share will be captured and they won’t be able to regain it without upping the ante. And I can’t imagine how they could do this. Nor can they pump taxpayer dollars into failing venues in an effort to make them more competitive. I’ve had this conversation specifically with Helene Keeley who I suspect was one of those who voted this down.
And again, I have to say that I don’t especially care about the casino business anyplace (altho I’ve been known to play a few cards). But it does not make ANY sense to me to expect that a group of people who do not have the cajones to ask for more revenue from the people who can afford it now — when we are in the middle of this horrific crisis — won’t have the cajones to deal with another revenue hit when these venues start to fail. Their best long term solution is to protect the *revenue*, and let the venues live or die as they will.
Casinos are not good for anyone except the state. It’s just another tax. THe house always wins!!!
and the tax revenue generated funds programs like…. education, fire departments, paving roads so you can go to your libertarian job and complain about how the gumment takes everything.
also, the same can be said about sports complexes, concert venues….. nevermind, it’s like trying to talk to a can of soda.