Two new Delaware casinos?

Delaware could be home to two more casinos, one each in New Castle and Sussex Counties.

House Majority Leader Rep. Pete Schwartzkopf (D-Rehoboth Beach) drafted the measure that authorizes two additional casinos in the First State.

It will be House Bill 40 when it’s formally filed Thursday. Schwartzkopf pushed for casino expansion last session, but it didn’t go anywhere. He told WHYY-TV’s First a bill was a priority for this legislative session.

“To me, this is all about putting people back to work… That’s how you break out of a recession. You create economic opportunities and you put people back to work,” said Schwartzkopf.

But Schwartzkopf says this bill differs from previous casino expansion legislation in that it would establish an independent, five-member commission to determine the location of the two new casinos. According to the bill, the volunteer commission appointed by Gov. Jack Markell, would include the Secretary of Finance, Delaware Economic Development Office director, a retired judge, a retired law enforcement officer and a retired banker. The commission’s decision, by majority vote, cannot be appealed.

Rep. Schwartzkopf says allowing the independent group to have final say takes the politics out of the process by taking it out of the Legislature.

“We are taking a back seat and let this committee set the criteria, the process and let them take the proposals and evaluate all the proposals. And based on the criteria that’s in the bill, they will come up with the proposal upstate and downstate that they think is best for our state,” said Schwartzkopf.

But the existing three casinos in the state argue more casinos will kill business in an already saturated market.

“What happens if you open a casino and adds a thousand jobs, but it closes another casino which loses a thousand. What have you gained,” argued Ed Sutor, President and CEO of Dover Downs, back in January.

Schwartzkopf points to the findings of an independent study commissioned and funded by the state in 2009, which determined the market could support five casinos in Delaware. Schwartzkopf admits the study showed two new venues would strip about 13 percent of profits from the three existing casinos, but says the state would gain 56 percent in overall revenue.

“Putting two new casinos, we hit part of the market that’s not being hit, which allows for the extra money coming into our state,” said Schwartzkopf, who uses Ocean Downs, a casino just south of the Delaware line, as an example whyDelaware needs a casino downstate. Schwartzkopf says owners of Ocean Downs also own Delaware Park in Stanton.

“Their target audience is the same people who live in Sussex County and play at Harrington Casino. So what we have now is the owner of Delaware Park taking millions of dollars out of New Castle County and investing it in Maryland so that they can take millions of dollars in revenue out of Sussex County.”

“If you look at places like Atlantic City, you find out that there’s too many casinos there now. All of them are not doing well… We want to make sure the same thing doesn’t happen in Delaware, said Cindy Small, with Kent County’s Tourism Bureau, earlier this year.

But Schwartzkopf argues comparisons to Atlantic City are both unfair and misleading.

“Atlantic City jams 11 casinos into a city that is less that 12 square miles, and the casinos would probably fit into two square miles,” he said. “Delaware has three casinos in two counties. We’re talking about a total of five venues spread out across two-thousand square miles.”

HB40 will be assigned to the House Gaming and Pari-mutuels Committee.