State finance staff and casino executives expect play to increase, but regional competition looms large
In their first few weeks, table games at Delaware’s three casinos have sent an average of roughly $398,000 a week to the state’s coffers.
While that figure falls short of the $558,000 per week in state revenues projected by the Department of Finance, budget officials and casino executives say table games are off to a good start.
“The numbers are going to be a little slower,” said Director of Finance Tom Cook. “It’s going to take some months for it to play out.”
Cook said the most recent revenue totals only take into account play through the last weekend of June, even though table games in some casinos were just getting off the ground. When the numbers were calculated, only Harrington Raceway and Casino had the benefit of full month’s worth of table play.
Harrington opened its tables May 28 and netted $402,000 for the state over the course of the month. Delaware Park opened on June 18 and brought in $271,000 in state revenues over 10 days. On June 25, Dover Downs Hotel & Casino opened its table game section and captured a little over $50,000 in state revenue during three days of play.
Based on their daily averages, if all three casinos had been open for the entire month, the state’s share of revenues would have been approximately $1.6 million.
If the pace doesn’t pick up and those averages persist, the state will fall $8 million short of the $29 million in revenues officials said table games would bring in this fiscal year.
Cook said there’s still a lot to learn about how table games will generate revenues, specifically what time of year they’ll bring in the most cash.
Gambling revenues ebb and flow from season to season, Cook said. Usually, the peak period is from New Years through June, when people start heading elsewhere for vacations. In the fall, play begins to increase again and builds to the winter/spring high.
Table games likely will mirror that trend, but not exactly.
Cook said casinos might see more table play during football season, since table gamers share demographics with those who are attracted to Delaware’s pro-football parlay games.
Peter Bradley, head of casino operations at Dover Downs, said he’s confident table games will get on track to meet or exceed estimates.
“We’ve felt all along that it’s going to take a good two or three months to really hit our stride,” he said. “We’re going to be growing each month.”
In its opening weeks, Dover Downs has focused on attracting new customers with table-game-related specials, advertisements and promotions. Bradley said it will be a little while before those initiatives build up a base of loyal customers.
“We pride ourselves on our customer services, all that coming together takes a little time,” he said.
Delaware Park President Bill Fasy said the state’s casinos also are dealing with a shortage of dealers, which means they can’t operate at full capacity.
“We’re experiencing in the Northeast a shortage of dealers. It’s at each property in Delaware and I know my brethren in Pennsylvania are having headaches, too,” he said.
But, as more dealers are trained and placed on casinos floors, the capacity to generate revenue will increase.
Fasy also said tables will become more profitable as newly-minted dealers get faster and can deal more hands.
“As they become more proficient the revenue numbers should meet what was budgeted,” he said.
Even if all that holds true and the state does realize the $29 million it anticipates, there is reason to be concerned about the future profitability of gambling in Delaware.
With a dozen or more new casinos opening their doors in Maryland and southeastern Pennsylvania over the next few months, Delaware’s casinos are facing a competitive environment like they’ve never seen before.
As a result, state budget officials are estimating a 6.8% drop in gambling revenues next year.
Fasy said the situation could be worse for his casino, the closest to new competition in the Philadelphia metro area.
“It will be interesting to see how the volume changes,” he said. “We’re the ones with the competitors opening up on an immediate basis. It might be [down] 10% at Delaware Park.”
Bradley said Dover Downs will rely on its hotel, restaurants, shopping promenade and spa to lure customers away from closer casinos and keep them coming back.
“It’s a crowded marketplace,” he said. “At the end of the day it really comes down to two simple things, your product and your service. We had a master plan a couple years ago to build the amenities and make the capital investment to get people to come here.”
Recent expansions have left Dover Downs with nearly $100 million in long-term debt, which Bradley acknowledges could make it difficult for the facility to expand and offer new attractions to compete with snazzy new venues just up the road.
Both casino executives said the best they’ll be able to do for the foreseeable future is dedicate money to upkeep.
“It’s going to be very difficult to expand whatsoever; it’s a matter of being able to invest more and get a return,” Fasy said. “You spend your capital on replenishing what you have.”
Email Doug Denison at email@example.com