Zombie Casino Alert! Part II

Another article in the NJ today provides some information on the purported losses to Delaware casinos as a result of the added competition from Maryland and Pennsylvania. An industry group points to a 2.5% loss of revenue over 2010 numbers, while the casinos point to a 13% loss in revenues for slots. It is difficult to do an apples to apples comparison since I assume the industry group’s numbers are overall revenues, while the local numbers are clearly slots. You’d expect a reduction in slot revenue, but you’d have to factor in table game and parlay bets into this since those are also included in DE casino revenues.

In any event, Hose Majority Leader Pete Schwartzkopf, has the right attitude:

“For years, the casino industry in Delaware has been 100 percent protected from competition, with good economies,” he said. “I think they’re very accustomed to making the big percentage increases. I think now they’re having to cope with the fact that the revenue is not coming in like it was before.”

Schwartzkopf also said the casinos are simply feeling the effects of the persistent economic recession.

“They’ve been protected for so long and now, all of [a] sudden, they have to do some of the things other businesspeople do to stay competitive,” he said. “God forbid, they might even need to take a pay cut. They’re basically having to do what the rest of us have had to do.”

Even Greg Lavelle agrees. Asking the state to jump in and help make these casinos whole when they certainly haven’t done the competitive work to make sure that they are appealing to their customer base is a ridiculous request. I would also ask how much they spent in lobbying the GA last year (and the year before) to make sure that casinos did not expand in Delaware. Pulling back their lobbying operation is one way to get more money to the bottom line, right?

The thing that these casinos knew once PA and MD started down the casino path was that their customer base was going to now have options. Lots of folks will gamble close to home (especially the slots aficionados) and they knew this. If they were not ready to compete with these new venues, that is a result of pretty poor business decisions and they should live with that and do the work to try to be more competitive. They were very successful in fending off potential competition in state, and but apparently at the expense of being competitive with other venues.

If Delaware is still going to protect these three, the least they can do is step up their competitive game.