Dover Downs will eliminate 24 jobs and stop offering table games in the overnight hours during the week.
Dover Downs Gaming released a disappointing first quarter earnings report that showed a 2.5 percent decline in gaming revenues. Overall revenue at the Dover casino for the first three months of 2015 were $44.3 million, down from $45.4 million in the first quarter of 2014. The company reported a net loss for the first quarter of 2015 of $352,000.
“Unfortunately, it was yet another disappointing reporting period for the company,” said Dover Downs President and CEO Denis McGlynn. “We continue to experience competitive challenges and operate under the current unbalanced and outdated gaming revenue sharing formula under state law.”
As a result, the company will no longer offer table games Monday through Thursday between the hours of 2 a.m. and 8 a.m. “This action, which we have delayed as long as we can, will eliminate an additional 24 positions and reduce our exposure to table game losses which, we expect, will help to improve performance going forward,” McGlynn said. “This further cutback is not a pleasant one to make, but unfortunately, in light of our position we must make it.”
In 2014, Dover Downs reported a net loss for the year despite eliminating 21 positions through attrition. During the first quarter of 2015, the company cut another 10 positions, but still ended March with a net loss.
Since opening in the mid-90’s, Delaware’s casinos had long enjoyed a monopoly as the only gambling venues in the region outside of Atlantic City. Today, competition has encroached on that monopoly with new casinos like Harrah’s in Chester, Pa., and Hollywood Casino in Perryville, Md., both minutes from Delaware’s border.
That competition has resulted in lower revenue. But that’s not the only challenge facing Dover Downs and other gambling halls in Delaware.
In response to the budget crisis in 2009, Delaware lawmakers increased the state’s share of gaming revenue. The state now gets 43.5 percent of slots revenue. In 2014, that equaled nearly $60 million of the total $136 million of slot machine revenue, according to the casino’s website: JobsforDelaware.com.
Last June, state lawmakers approved a $10 million assistance package for the casinos. In January, the state Lottery and Gaming Study Commission recommended that the state provide $46 million to the state’s three casinos. That recommendation could be difficult to implement as the state faces declining revenue in an already tight budget year.