Delaware casinos: Panel recommends $46 million bailout

A panel studying ways to find fiscal relief for Delaware's lagging gambling industry recommended a nearly $46 million package to provide a pathway to stabilize its three casinos.

The move, a shock to several members of the Lottery Gaming and Study Commission, comes as the state faces yet another tight budget year. Where the money would come from to fund such a recommendation was a question on the minds of many commission members.

"This has become an annual tradition that is not sustainable," said panel member and House Majority Leader Valerie Longhurst in a prepared statement. "If approved, this would total more than $63.5 million to casinos in the past three years."

She and another House lawmaker, Rep. Charles Potter Jr., a Wilmington Democrat, voted against the measure. Longhurst is preparing a minority report to counter the proposal.

The recommendation, which passed 5-4, would cost the state $15.8 million in the first year via several components, including the elimination of the fee to operate table games, a cut to the state's share of revenue from table games and the state picking up more of the cost to maintain and operate slot machines. The state's horse racing industry would also stand to make more money from slot machines as part of a late amendment.

Year two of the proposal pitched by Sen. Brian Bushweller, a Dover Democrat, would provide a 5 percent tax credit, based on yearly slot revenues, for both marketing and capital expenses. One casino executive estimated that to be as much as $30 million a year.

"We're taking too much money," Bushweller said. "The simple solution is to take less money from the casino industry."

During the waning hours of last year's legislative session, lawmakers approved a $9.9 million package to help pay casino vendors.

The recommendations, which could be put into legislation, is also opposed by members of Gov. Jack Markell's administration.

"We need to look for a long-term solution and I don't believe this is the long-term solution at this point," said Finance Secretary Tom Cook. "If this were an easy issue to solve, then they would have solved it in Atlantic City and we wouldn't have had to have met for two years."

Denis McGlynn, chief executive of Dover Downs, said the commission's decisions were the right approach for a long-term solution.

"The industry is no more interested in being back year after year than the Legislature is," he said in an e-mail. "The commission has studied the industry for two whole years now and a majority of its members have concluded that this package is what's needed to allow the industry to compete. We hope the Legislature will support the recommendations of the committee they established."

Contact Jon Offredo at (302) 678-4271, on Twitter @JonOffredo or joffredo@delawareonline.com.