Dover Downs earnings drop $4.7 million

Dover Downs reported a massive drop-off in net earnings during 2013, reporting $13,000 in earnings last year, compared with $4.8 million in 2012.

Denis McGlynn, president and CEO of Dover Downs Gaming and Entertainment and Dover Motorsports Inc., said the precipitous reduction is due in part to increased competition in the area, especially Maryland Live!, and a challenging operating environment.

“I think the numbers validate the story we’ve been telling everyone basically, and most particularly those who do control our destiny,” McGlynn said.

“It doesn’t take a rocket scientist to figure out what next year is going to look like,” he said later.

This morning’s earnings report comes a day before the nine-member Lottery and Gaming Study Commission, made up of state officials, lawmakers and business professionals, is slated to submit options to lawmakers on how best to assist Delaware’s ailing casino industry to make it more competitive with neighboring states.

For months, the commission has been at loggerheads over how to rework the industry’s tax structure, and provide additional revenue options. It was only until a meeting last week that members discussed a dozen possible options using Fiscal Year 2015 revenue projections.

Among them are options to restore revenue distribution from video lottery games to pre-recession rates, which would cost the state $25.5 million, a sharing of vendor fees, a reduction in the state’s tax rate on table games, and a proposal to implement a complimentary hotel room incentive program.

McGlynn compared the options to a menu of sorts, saying casinos could take it all in one bite, for example, with the restoration of a tax rate, or take a combination of other options, spread over time.

Whatever the commission ends up recommending, every little bit helps, he said.

The only way to sustain this sort of bottom line is to cut expenses, he said. In 2009, Dover Downs cut about 100 jobs. Since then, they’ve hired more part-time than full-time workers.

McGlynn said he didn’t know if there would be job loss this year, but that it was going to be “inevitable if the casino couldn’t get any relief.

Contact Jon Offredo at joffredo@delawareonline.com.