Study commission proposes $45M hit to state budget to help struggling Delaware casinos



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DOVER, Delaware — Another taxpayer bailout for Delaware's struggling gambling industry won a narrow endorsement Thursday from members of a state study commission.

The panel voted 5-4 to recommend an annual cut of almost $46 million to the state budget to help Delaware's three casinos, which continue to lose business to newer and bigger casinos in Maryland and Pennsylvania.

The proposal, which comes on top of a $10 million bailout last year, is opposed by Gov. Jack Markell's administration and faces an uphill battle in the General Assembly.

"I honestly don't think it will have the support in the General Assembly to pass," said House Majority Leader Valerie Longhurst, D-Bear, who voted against the proposal. Rep. Charles Potter, D-Wilmington, state economic development director Alan Levin, and finance secretary Tom Cook also dissented.

The proposal is being pushed by Democratic Sen. Brian Bushweller, whose district includes the Dover Downs casino. He said the answer to the problems plaguing Delaware's three casinos is simple.

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

Bushweller's proposal calls for the state to pay 43.5 percent of the casinos' total vendor costs. That would cost taxpayers an additional $3.3 million annually over what they pay in the current cost-sharing arrangement.

It also cuts the state's share of table games in half, from 29.4 percent to 15 percent, at an annual cost of $6 million, and eliminates the $3 million annual table game licensing fee that the casinos collectively pay.

Perhaps the most contentious point is Bushweller's proposal to give the casinos annual credits on slot machine revenue of 5 percent each for both marketing and capital expenditures.

"If you want this industry to fight the competition, you have to give us the resources to do it," said Denis McGlynn, president and CEO of Dover Downs Gaming and Entertainment.

Officials estimated the cost of the marketing and capital expenditure credits at $30 million annually — a cost that could fall entirely on the state.

"They want us to pay the full thing, and that's not fair," Levin said.

Bushweller said the proposal is aimed at providing long-term stability for the casinos, which have come to lawmakers annually for the past several years asking for financial relief.

"I get a sense that an awful lot of people are tired of this process," Bushweller said, drawing quick agreement from Longhurst.

"Yes, we are getting tired of coming back and coming back," she said. "I'm pretty much done with it."

Opponents also were critical of an amendment to Bushweller's proposal by Sen. Bethany Hall-Long, D-Middletown, to give Delaware's standardbred and thoroughbred horse racing industries an additional 1 percent of gambling revenue, while cutting the state's share. That proposal would move an additional $3.5 million in taxpayer money to the pockets of the horsemen each year.

"I do have a concern about giving money back to the horsemen," Cook said. ".... "It's going to make this very tough to swallow by the General Assembly."

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