Delaware Liberal

Zombie Casinos, Replicating

Delaware State News reports today that there is a plan percolating in the GA to *add* three more casinos to the mix as a way to address the state’s declining revenues from the current three. Read that again — 3 casinos that are suffering from a declining market share will have 3 more casinos in state to steal their market share PLUS lose their share of out-of-state players.

One current version would have the state sell three more casino licenses with a minimum bid of $10 million per, doubling the number of casinos in the state.
Though still being formulated with no specific timetable, the idea serves as a sharp contrast to the one put forth in a Senate bill that would, critics claim, simply bail out the existing establishments.

Darrell Baker, who runs a law office in Delaware, is working with legislators to draft the plan. He also represents clients hoping to start a casino and so has a vested interest in opening up the market.

Mr. Baker has spoken at several meetings of the Lottery and Gaming Study Commission, criticizing officials for letting the existing casinos act as a monopoly.
In an interview, he rejected claims the decline of Dover Downs, Delaware Park and Harrington is due largely to market saturation.

“They have sucked the money out of those properties for so long, and they overleveraged them and now they have the unmitigated gall to come and ask for a bailout,” he said of ownership. “Why doesn’t every other business in the state do that? They want a monopoly and a tax break.”

Mr. Baker declined to name his clients or any of the lawmakers behind the plan, but Rep. Charles Potter, D-Wilmington, has been perhaps the loudest proponent in the General Assembly of opening up the market.

Do you know what you need to about this plan now? Seriously, if there was a market still untapped for gambling in Delaware, Baker’s clients should be able to produce market research to demonstrate that. My guess, though, is that the market research would show you that the clients would just shift (after an initial novelty bump), accelerating the problems for the current crop of casinos and adding three more that won’t be able to hold on for very long. But they’ll have the GA bailing them out because that is what the GA does. Several years ago a study group did recommend more casinos (at the beach and in the Wilmington area), but that was before Maryland and PA expanded their offerings so successfully. Those expansions ate into the client base for Delaware’s casinos — because why go to Dover when Maryland Live, Horseshoe Casino in Balto, and the Philly area casinos are so much closer to where those clients live? The window to genuinely compete here is pretty much closed unless there is a developer that is going to build something worth traveling for. And who sees that happening?

I wish these folks were working as hard on expanding the port and its client base as it is on expanding a dying business in this state.

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