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New casino bailout legislation headed to Dover

Delaware Public Media

Sen. Brian Bushweller (D-Dover) is taking a more long-term approach in his latest casino bailout bill.

In an attempt to gain more legislative support, the new proposal would ease the hit to the state’s wallet by implementing its changes over the next four years instead of three.

Delaware would forego a table game franchise fee and drop the table game tax rate by nine percent in the first year, costing about $13 million, according to Bushweller.

The effective tax rate will eventually dip to 15 percent by 2018 – down from its current 29 percent. He says that could expand what’s now a flailing part of the casino industry.

“There will be an incentive now for casinos to try and build up their table games and it’s possible that they could actually build the table games to the point where both the state and casinos are making more money on table games than the state is making now," Bushweller said.

It's something that has long been on the wish list of casino executives, who have lobbied the General Assembly consistently in recent years to take on a bigger share of the cost of running their businesses to avoid losing out on their revenue entirely.

"We believe that without making these changes, the State will experience a significant long-term decline in contributions to the General Fund from its video lottery operations,” said President and CEO of Dover Downs Gaming & Entertainment, Inc. in a recent SEC filing.

State officials would also offer tax credits for marketing and capital investments, which would be phased in fully in alternating years.

Other changes include legalizing internet sports parlay betting and cutting a provision earmarking the first $3.75 million of all online gambling revenue for the state.

The Controller General’s office hasn’t finished a fiscal analysis of the bill, so it’s unknown if the proposal will top the $45.8 million of cost Bushweller’s previous bill that never gained traction.

He says he hopes this will be a more permanent fix to upright the tepid industry.

“I can’t guarantee that that’s the case, but that’s part of the intention and that’s one of the things we tried to balance in recognizing the cost in terms of reduced state revenue. But we also wanted to look at it in terms of, ‘Let’s not do another one-off here.’”

The bill comes at a time when the state is beginning to buoy upwards with recent projections of more cash to spend – a rarity in recent years – and competition over those dollars in the form of proposed new programs, tax cuts and other initiatives is fierce.

Dover Downs, the only publicly traded company out of Delaware's three casinos, posted a $1.8 million profit for 2015 last month, despite gaming revenue continuing to fall. It lost $706,000 in 2014 and is currently fighting to keep its listing on the New York Stock Exchange.

The company also cut 72 jobs last year, mostly through attrition, while dropping overnight table games on weekdays in an effort to trim costs.

Bushweller has not yet requested a hearing for the bill.

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