Study suggests Delaware add more gambling venues

The State of Delaware was told Tuesday the best way to maintain or increase its gambling revenue in the face of out of state competition is to add two more gambling venues to the three already operating in the First State.

The State of Delaware was told Tuesday the best way to maintain or increase its gambling revenue in the face of out of state competition is to add two more gambling venues to the three already operating in the First State.

The Sports and Video Lottery Commission heard from TMG Consulting, who it hired in November to examine the potential impact of adding gaming venues to the state’s three racinos, Delaware Park, Dover Downs and Harrington Raceway. TMG’s report, over 250 pages long , concluded the state could maximize revenues by adding two new sites.  It suggested the best locations would be in Northeast Delaware and Southwest Delaware.  It also suggested the new venues not offer horse racing.

“The bottom line, what we learned is that the State of Delaware is capable of absorbing two more gaming venues, beyond three racinos, ”  said commission chairman Dennis Rochford. “The benefit of that decision is, over a five year period from 2013 to 2017, an increase from $1 billion to $1.7 billion in terms of revenues into the state’s coffers.”

The three existing racinos are already questioning the study’s findings.  The study itself concluded the three existing venues would suffer “serious detrimental effects”, but added they would not face shutting down.  Last month, Delaware Park, Dover Downs and Harrington Raceway released their own study, completed by Deloitte and Touche, that concluded adding additional venues would “further cannibalize a decreasing market and add significant pressure to the financial health of the existing casinos.”

“The part that is the hardest for us to believe is that adding two additional casinos to this saturated state is going to produce $300 million more in revenue (in 2013). Where’s it going to come from?”  said Dover Downs president Ed Sutor. “They did a poll that said 56 percent of people won’t drive more than 45 minutes, yet when asked where this going to come from, this $300 million, they say out of state.  It just doesn’t compute.”

The Sports and Video Lottery Commission is asking TMG for further details on some issues and expects to hear back at their next meeting, Tuesday January 12th.  At that time, they hope to release a final report to the General Assembly and Governor Jack Markell as they decide whether or not to add venues during this year’s legislative session.

“The people are going to have to look at the whole project and figure out where they stand on this,” said State Representative and House Majority Leader Pete Schwartzkopf  (D- Rehoboth), who is supporting the proposed DelPointe racino project in Sussex County.

“There’s no question the economy and our current revenue situation clearly adds an urgency to this,”  State Senator Colin Bonini (R- Dover South) said. “I hope we don’t make a decision in sort of a crisis mode.  I hope that we will take our time to look at this and do this correctly.”

The first day of the new legislative session is next Tuesday, January 12th.