The Dover Downs Hotel & Casino in Delaware’s capital has announced plans to merge with a Rhode Island-based gambling company.
In a Securities and Exchange filing Monday, Dover Downs Gaming & Entertainment said it had entered into a definitive merger agreement Sunday with Twin River Worldwide Holdings.
The Dover complex, which also has a racetrack, lost $1 million last year.
Officials are hoping for a reversal of fortune after its alliance with Twin River, the owner of two casinos in Rhode Island, one in Mississippi, as well as a Colorado horse race track.
As part of the agreement, privately held Twin River will become a publicly traded company. The agreement calls for Dover Downs stock to be exchanged for Twin River common shares representing 7.2 percent of the equity in the combined company at closing.
The closing of the deal is subject to approval by regulatory authorities and Dover Downs shareholders.
The merger will mean long-term stability for the casino that’s been beset by increased competition from nearby states in recent years, said CEO Denis McGlynn.
“We’re now going to be part of a bigger, stronger, growth-oriented company, as opposed to being a standalone single property surrounded by mega-casinos in the surrounding metro areas,” McGlynn said.
“I think Twin Rivers will make the investments in our people, in our marketing programs and facilities — all the things we need to occur in order to present the most impactful competitive front we can, given this environment we operate in,” he said.
Last month, the Delaware General Assembly and governor approved a $16.8 million tax decrease for Delaware’s casinos. The casino operators had sought a bigger tax decrease.
“I don’t know if the outcome would’ve been different. (I still would’ve voted no), but this is the sort of thing a business should give legislators a heads up about when asking for a massive tax relief bill,” tweeted state Rep. David Bentz, D-Newark/Christiana.
Securities and Exchange Commission rules require these discussions to remain private, McGlynn said. And he maintained the tax relief was still necessary.
“The situation with the revenue sharing model with the state has just been unworkable,” he said. “What happened with the legislation was entirely necessary and would have been regardless of this transaction.”
McGlynn said he expects any potential impact on jobs at Dover Downs, which has about 900 full-time workers, 600 part-time workers and 300 subcontractors, would be minimal.
“We were a pretty lean operation by default here,” he said. “There’s really no fat here to get cut.”
The Associated Press contributed to this report