It’s not quite the Zombie Apocalpyse (Casino Edition), but Delaware’s casinos have formally asked for the state to make them healthy. Or, at least, healthier. According to this NJ article, Delaware’s casinos will be asking for givebacks to the tune of $10M on licence fees as well as for the state to reduce the taxes on the games and slots. And look why they want to reduce their contribution to the state coffers:
Sutor said the tax and licensing fee breaks are necessary to bolster Delaware’s gambling industry, which has taken a serious hit because of aggressive competition in a regional market that now features casinos in Pennsylvania, Maryland, New Jersey and West Virginia.
We knew this was coming. Just not this fast. But casinos asking for the state to make them profitable is the best reason ever for the state to not be in this business. This is a volatile industry that the government is counting on some stable revenues from, AND these captains of industry have decided that they can be profitable at the expense of taxpayers. These are the same captains of industry who are counting on the state to restrict additional competition in the form of new venues at the beach and/or in Wilmington. This is a textbook example in how governments get captured by an industry — and how an industry relies on the government for its survival, rather than on outcompeting your competitors in a free market.
Fortunately for now, Governor Markell isn’t especially interested in giving up those revenues:
“We remain interested ourselves in working with them on a thoughtful plan to ensure competitive advantage,” said Markell spokesman Brian Selander. “However, providing large taxpayer giveaways to the casinos at this point is not something we support.”
These casinos are also playing the job cuts card, but they also said that they’d get rid of jobs if other casinos came on line in Delaware to compete with them. If these venues aren’t profitable, then it might be time to cut back on their operations — which is what most other corporations do, rather than ask for taxpayers to support your balance sheets.
This is likely the opening gambit for a legislative season-long negotiation with these casinos. I’m glad that the Governor isn’t capitulating yet. But I ask you — what do you think of the chances of a deal where the Governor gives them back some revenues in return for these casinos standing down on their objection to expansion venues?