Zombie Casino Alert!
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?
Tags: Delaware Casinos
Maybe they ought to up their payouts. I went twice to the racino at De. Park when it first opened.
I ran through my $$’s much faster than I ever had done in AC. Soon figured out that the machines were programmed to be real cheap with the payouts. Never been back.
I rarely go to the casinos anyway, but I went to the Harrahs in Chester a few months ago, played video poker, and realized that I was playing against a fair program that accurately reflected the normal odds.
Why would I ever go back to a rip-off like Delaware Park? I betcha that I’m far from the only one who came to this conclusion.
Delaware’s casino industry is controlled by a bunch of bloodsuckers and we’re the ones getting sucked. Um, or something like that.
The Widder Rollins does not need my money.
I am working on my letter to my elected officials this weekend. I plan on telling them that my relatively stagnant income is no match for increasing health care, heating and air-conditioning, education, insurance and other expenses. I am also now expected to guarantee profits for an energy company. I cannot remain competitive, or even above water, in this environment, so I will be requesting tax relief and other assistance. I can’t wait to see the reply.
From a practical perspective, as tax payers we need to support the casinos otherwise we’ll lose our thoroughbred racing industry which employees tens of works and brings untold hundreds of dollars to the state.
I hear you on this, but if a mature industry (horseracing) needs taxpayer funds to survive, that is an industry that is already the Walking Dead. I’m not happy about the loss of the employment or of the racing, but these venues need to be able to live without my tax dollars bolstering their balance sheets. I don’t see the state rushing to the aid of, say, independent bookstores who also provide value to the state and their communities. Maybe it is just that booksellers don’t have a killer lobby. Taxpayers shouldn’t be a safety net for businesses that can’t figure out how to be competitive.
El Som, you nailed it. I have heard the same complaint about table games from my erstwhile gaming buddies. As they say on Wall Street, Pigs get fat, Hogs get slaughtered. Now there’s pigs in Chester. heh.
Im about to blow both of you out of the water:
PLEASE – do your homework – the payout is regulated:
“payment for payout from video lottery machines such that the payouts shall not be less than 87 percent on an annual average basis, and shall otherwise comport with the requirements contained at 29 Del. C. §4805(a)(15).”
7.5 Each video game shall provide a method for players to view payout tables.
10.7.2 iv) to change the percentage payout on a video lottery machine;
if you think you are going to win – dont play – it you cant manage your money, dont play – but for Pete’s sake – stop ur whining.
and BTW for TNJ – DE does not TAX casinos – New Jersey does – DE has a revenue share situation. get a grip! do some homework
http://lottery.state.de.us/pdf/Video_and_Table_Regulations.pdf
Im referring to Bue-Coq and El SOM – not cass
I don’t play there precisely b/c of the low payouts. What the law permits and what the casinos actually do may or may not be the same thing.
It didn’t take long for me to figure out that payoffs at Delaware Park were like those on a cruise ship. Which is why I managed my money by putting it back in my wallet and going elsewhere.
Oh, and ‘stop ur whining’ is hardly the promo that a casino would want to be associated with.
Besides,that sentiment is best put to the petits pauvres casino execs whining about how they can’t make money in the easiest racket on earth.
I guess you have a lot of insider knowledge about what the “captains of industry” are looking at, but at least Dover has benefited from the DC traffic, which will soon have arundel mills to go to. So there’s a pretty good haircut off the market share of folks who have been contributing to slot revenue in DE, and that will be going to Maryland. There has been a lot of investment in the Delaware slots, and those investors will leave and this (as you aptly stated) volatile industry will cease to create revenue for the state. Would you rather these operations thrive and create less revenue for the state, or cease to exist and create no revenue and one more lost job source?
That’s a false choice. How about opening up the casino industry to more than the monopolies held by the racinos and let the market decide (a radical theory, I know) who succeeds and who fails?
So what part of free market don’t you understand? It’s not a free market if taxpayers provide the profit margins. Full stop. And this isn’t exactly an emerging industry that might need the temporary support.
These companies are asking you to provide them a much better profit margin and in return they’ll keep (fewer) people employed and return less money to the state’s coffers. This is just a dumbass bet. Because if they aren’t healthy now with the increased competition from other venues, they won’t be getting any healthier in the years to come.
Im sorry I dont mean to pick a fight – but this comment alone “What the law permits and what the casinos actually do may or may not be the same thing.” shows you hove no concept of how or who regulates the industry
do you think they are just out there with no oversight – have u gone to the website and found out how its run and regulated/audited etc??
what do you really now about the internal working of the industry and the states ability to monitor it?
seems nothing, based on that comment
Yeah, only in America can the gubbamint come in and take 35% off the top of one facet of their business (table games) and 60% of the other main revenue generator (slots), and then tax their bottom line as well, and have people complain! The casinos also kick in another $4M and $6M for sports betting and table games license fees (respectively). It’s truly priceless that the casinos in this state generate millions every year for liberal social programs, yet the liberals cry when the casinos ask for relief from their partner (the state). The 3 casinos in this state support thousands of jobs, in an economy that is at 9% unemployment. These casinos can’t compete anymore due to the competition from PA and MD. AC has a 7% to 8% tax rate – PA is at 14% on tables. Our short sighted gubbamint is going to drive our casinos out of business and really put DE in a bad position financially. DE Park and Harrington have already discontinued their 3rd shift on tables. The casinos aren’t bluffing – no tax relief this winter and there WILL be layoffs again. They will not continue to operate at a loss on table games. But hey, what does Jack care? He’s clearly not interested in helping the casinos and the jobs and revenue they create for DE.
Hey Cassandra M — you must be incredibly misinformed. The tax payers fund the profit margins? That’s absurd. The 3 casinos would LOVE for the gubbamint to get out of the way so they can actually start making some real money and continue to invest and create jobs in DE (like they have in the past). The casinos aren’t asking for any taxpayer relief -they are asking to stop being pilfered by the state and for DE to come in-line with other states with their “off the top skim.”
It’s not a free market when the oppressive gubbamint makes it impossible to compete.
Its also not a free market when the 3 casinos say no to a 4th casino in the state (and lobby the gov’t to keep it from happening). Limiting competition is a good way to keep from competing, and using the evil gov’t to do it!
DialogueDel did some great twitter coverage of Markell on CNBC Squaawk Box yesterday morning including
“I don’t believe in picking industries,” @GovernorMarkell says. What about Bloom? #netDE
http://mobile.twitter.com/dialoguedel
plus nytimes New York’s First Casino, at Aqueduct Racetrack, Is Set to Open nyti.ms/usjVDB
35% is a perfectly legitimate tax on companies providing some public benefit. For industries, like casino gambling, that are a public nuisance, 60% is probably on the low side.
Every year (two days prior to the casinos claiming dire financial hardship) Markell should announce an increase on casinos taxes. Let the lobbyists earning their millions playing defense.
Don’t these things still technically violate the state’s contitutional ban on Gambling exept on bingo and lottery duhh. That’s the biggest break these clowns got when the state contitution was magically reinterpreted
Yep. That interpretation that slot machines are in fact video lotteries. Yet another ‘written to spec’ opinion.
Without that, they would have had to amend the State Constitution, meaning the same language would have to pass two consecutive General Assemblies, which wasn’t happening back then.
So, this thing was ginned up from the beginning, allegedly to protect Delaware’s horse-racing industry.
The self-same fat cats who got themselves a legalized monopoly are now singing the blues about having to pay too much in taxes and crying that their businesses aren’t profitable.
My solution is to open up the marketplace and allow the market to determine the winners and losers. It also wouldn’t hurt to see if the GA could cobble together a coalition to pass that constitutional amendment…
GINPac, you are not only misinformed, but you can’t read. The industry itself says they want the state to cut back its fees and share of the take so they can maintain their profitability in the face of additional competition. So rather than figure out how to out compete their competition, they just want to tap into the taxpayer’s funds.
And as noted, those taxpayers fund a good deal of the infrastructure that makes these casinos work — and they also fund the government sanctioned monopoly they enjoy plus that crazy looking the other way on the constitutional issues. If they don’t want these protections, they should drop their objection to additional venues.
@GINPac – you are incredibly misinformed like Cass says nor can you read
its 29.4% on Tables and 60% on slots – and NO TAX!! its all in the regs and the law – just read it and stop spreading lies
compared to other states the casinos here have it sweet – they negotioated the current agreement – they said it was acceptable. the state leases the slot machine FOR the casino. And the casino gets 40% of the action on the machine – for doing NOTHING – no lease, no purchase… just a place to put the thing while it makes u money
No other state does that –
as for libera social programs?? police and education are liberal social programs to you?
you’re just another ill-informed idiot
as for the 3rd shirt Delaware Park did it first – you kno – they guy that opened Dover Downes, just over the line in MD that competes with Harrington Raceway?? yeah, that guy. He ownes Dover Downs too
get informed before opening your mouth and proving you are an idiot.
Aoine – I’m an idiot because I point out facts? That’s harsh and not very tolerant. It’s not a tax? What else would you call it when the gubbamint takes 30% + a license fee of almost $6M on table games? Call it what you want – when the gubbamint takes your money, it’s a tax.
The state sure does lease the machines – and then they bill the casinos for it for another 7.3%. Guess you missed that part when you read the regulations And after the casino’s payroll is paid, marketing, and all the other costs that it takes to run a business, they get to pay state and federal income tax too on the bottom line. You have it backwards — the state takes all the revenue without any risk. It’s the casinos that are the ones that have to make their payroll.
The “guy that owns Delaware Park” does not own Dover Downs.
Anything else that I “lied” about?
And what’s with the name calling ?? That’s weak.
Cassandra, I’m unaware of the infrastructure that the state provides the casinos. Would you be able to provide some examples? I didn’t see anything in the Dover Downs 10-K about that. Are you referring to something at Del Park or Harrington?
I meant to say he owns Ocean Downs- sorry – mistype.. but that is all I am apologizing for
you r obviously a lobbyist for or apologist for the casinos
how do you explain that they NEGOTIATED the current agreement – they signed the current agreement – They agreed to it not all that long ago either – now they are crying foul??
and yes = you ARE a liar to call police departments and education for our children – “liberal social programs” – hey, you are the one that said that, not me
and as far as the expenses of running a casnio – care to explain the BONUSES some casino execs are getting?? HMMM?? if they are so poor what about that?
go to any casino- look at the VIP/EO parking lot – what cars to you see there – from the CEO down thru directors…. ummm BMW, Lexus,Mercedes, Cadillac, Shelby Cobras, all very nice cars… look at their homes and life-styles….wanna save money – start there
NOT ON THE BACKS OF THE TAX-PAYER!
as far as the idiot comment – well, look, you want to come in here and be ecomomical with the truth? go ahead…but be prepared to be called out on it. Maybe some folks in here really do know what goes on IN that industry and dont suffer either fools or liars lightly.
or those that would subvert the realities of the the industry to pander and push an agenda
whoops I forgot – when you lie about a percentage its a lie
and the percentage for tables is 29.4% not 35% as you said and
here is INFASTRUCTURE:
http://delcode.delaware.gov/title29/c048/sc01/index.shtml
§ 4822. Annual crime report.
The State Lottery Office, with the assistance of the Attorney General’s Office and the State Bureau of Identification, shall annually provide to the General Assembly a report detailing the crimes that occur within the communities surrounding each racetrack property, including an analysis of crimes relating to table gaming, whether in or outside the property of a video lottery facility.
§ 4824. Advisory Council on Video Lottery Planning
§ 4828. Licensing of video lottery agent directors, officers, and employees
§ 4837. Lottery Commission
http://www.delottery.com/pdf/lotRulesRegs.pdf
any questions???
GIN: Surely you jest. What we have are 3 businesses that would have gone out of business had the government not given them casino licenses, that have now raked in over $1 billion each (DP and DD) thanks to a “gubbamint” giveaway.
The “invest and make money and create jobs” is a line of happy horseshit. Every dollar spent at a casino is a dollar not spent at another entertainment venue — check out any of the dozens of studies that show that happening wherever gambling is newly introduced. The casinos’ restaurant jobs are taking jobs from other restaurants. The casinos’ hotel jobs are taking jobs from other hotels, and so forth.
“The casinos aren’t asking for any taxpayer relief -they are asking to stop being pilfered by the state and for DE to come in-line with other states with their “off the top skim.”
Until two years ago, the casinos enjoyed a smaller “off-the-top skim” than all but one other state. Welcome to the real world — this IS what other states get. You could look it up.
It’s not a free market when the oppressive gubbamint makes it impossible to compete.
“I’m unaware of the infrastructure that the state provides the casinos.”
Then why do the State Police have to increase hiring every time the casinos expand?
In short, you’re a typical “free market” advocate — as long as people provide you stuff for free (in this case, the licenses required to operate), you’re in the market.
Time for the state to revoke their licence and run the operation
Casinos and legalized gambling were great business for Nevada, when nobody else had legal gambling. Then Atlantic City got in on the action, and hey, they’re a continent away from Las Vegas, so there was still plenty for everybody.
Then, slowly, other states started seeing the potential revenue, and we have casinos in Pennsylvania, riverbopat gambling up and down the Mississippi, lotteries in virtually every state, and pretty much every state is looking at ways to cash in.
And now we see that the market might be getting oversaturated, as a google search for casino goes bankrupt gives you nearly six million returns. Of course, the recession didn’t help them any.
If people want to gamble, I really don’t care; it’s their money, and they can do with it whatever they please. But as everybody gets into the gambling business, it’ll cease being quite as lucrative for everybody involved, and the revenue the states anticipated will probably not match their expectations.