A state panel comprised of casino executives, lottery officials and gaming industry vendors heard feedback March 2 on its annual list of proposed changes to the state’s gambling regulations.
The Video Lottery Advisory Council met at Dover Downs Hotel & Casino to hear what officials from Gov. Jack Markell’s administration had to say about a slew of suggestions the panel submitted in November.
In January, the panel’s top priority was taken care of when the Markell signed a law authorizing table games at the state’s three casinos.
But, other suggested changes remain on the table, and not all of them have been well received by the administration.
The recommendation:
Provide a financial incentive for casinos that make capital expenditures for expansions and upgrades to their facilities.
Why the casinos want it:
During the negotiations over the revenue split for table games, the industry noted that when West Virginia authorized tables it also created a rebate structure that rewards capital expenditures. Dover Downs Hotel & Casino CEO Ed Sutor said that West Virginia casinos have received more than $110 million in incentive funds, which has encouraged them to expand and provide more amenities, ultimately attracting more gamblers and kicking more revenue to the state.
What the administration says:
The final deal reached on table games in Delaware includes a provision to reduce licensing fees for the state’s casinos if they make a minimum level of capital expenditures in a particular year. Savings could total more than $8 million a year spread among the three venues.
However, the provision won’t apply to the expenditures made so far in preparation for the launch of table games.
Secretary of Finance Tom Cook said that’s as far as the administration is prepared to go, for now.
“We tried to blend this into the negotiations, with regard to the annual franchise fees,” he said. “We’ve opened the door. I guess time will tell.”
The recommendation:
Use state money to partially subsidize or match funds spent by casinos to advertise out of state.
Why the casinos want it:
This proposal also comes from West Virginia, where the state runs a joint marketing campaign with the casinos targeted to potential visitors in neighboring states.
Sutor said Delaware needs to aggressively promote its new sports betting and table game offerings if it wants to stay competitive in a market where all its neighboring states also have casinos. Since the state stands to gain from solid out-of-state advertising, it needs to share in the expense.
What the administration says:
Cook said the administration is open to discussing the possibility of some joint marketing, and he’s talked about the issue with the Delaware Economic Development Office.
One possible venture would have the casinos and DEDO team up to place advertising in the Interstate 95 rest stop in New Castle County.
The rest stop, which is undergoing renovations, would be an ideal platform from which to reach the thousands of out-of-state travelers who pass it every day, Cook said.
The recommendation:
Budget funds within the Lottery Office for marketing the casinos.
Why the casinos want it:
The Lottery Office spends almost all of its advertising budget on traditional lottery items, like scratch-offs and Powerball. But, just like the plan for subsidizing out-of-state advertising, the casinos argue that the state should share some of the costs required to draw gamblers, and their money, to the venues.
What the administration says:
Lottery Director Wayne Lemons said the issue is simple: His agency’s marketing budget is just too small to support such an effort.
“We’re not going to have anything left for our traditional lottery,” he said. “We don’t have a large advertising budget.”
Lemons said it would be up to the governor’s office and ultimately the legislature to decide if he gets more money to spend on marketing.
The recommendation:
Allow casinos to be open on Easter and Christmas Day.
Why the casinos want it:
Sutor said he knows of no other jurisdictions in the region that prohibit gambling on holidays. He also said there’s a sizeable group of potential casino patrons who aren’t Christian and for whom the two holidays are just like normal days.
“The Asian population comes out in droves on Christmas,” he said. “That’s a sizeable group of very big table game players. It could be millions of dollars.”
Though the change would require legislative action, Sutor said it could be a simple amendment tacked on to the next piece of casino legislation that comes up.
What the administration says:
Cook said the issue was a non-starter during the administration of former Gov. Ruth Ann Minner, but he admitted he hasn’t discussed it with Gov. Jack Markell, who is Jewish.
The finance secretary also said the Christmas Day restriction also limited the state’s sports betting enterprise.
“We lost some activity we would have had there,” he said. “We saw revenues drop off some on that weekend.”
The recommendation:
Allow casinos to serve alcohol around the clock whenever they are open.
Why the casinos want it:
Casinos in Atlantic City, N.J., are allowed to serve alcohol 24 hours a day, and casinos in Pennsylvania can serve until 2 a.m. In Delaware, casinos have to stop serving at 1 a.m., just like bars.
Sutor said the ability to get a drink any time of the day or night is a big thing for casino patrons, and the current rule puts Delaware’s venues at a competitive disadvantage.
To quell cries that the state’s Alcoholic Beverage Control Commission already is swamped trying to keep up with enforcing liquor laws, Sutor suggested enforcement be handled by the new office charged with policing table games.
What the administration says:
“This is one that I would probably say will not happen this year,” Cook said.
Just as the casinos argued the current law puts them at a disadvantage compared to other states, Cook said the proposal would put Delaware taverns at a disadvantage compared to the casinos.
He also raised obvious concerns over how such a policy would impact public safety and the amount of drunk drivers on the road.
Finally, Cook said neither the ABCC nor the new gaming control office have the personnel necessary to oversee such a situation.
Email Doug Denison at doug.denison@doverpost.com.
