Compromise amendment reduces Governor’s proposed split and jumpstarts table games.
The Delaware House of Representatives resurrected the sports betting bill it defeated May 5 and passed the measure with a compromise amendment in the early hours of May 8.
House Republican leaders shuttled back and forth between the governor’s office and their caucus room in Legislative Hall for nearly eight hours, contemplating possible amendments to the bill that would allay their fears that Harrington Raceway and Casino would be forced to close if it became law.
Shortly after midnight, the House voted to recall the Tuesday vote, and then voted on an amendment that revised the proposed increase in the state’s share of gambling revenues and put table gaming on a fast track.
The amendment scaled back Gov. Jack Markell’s proposed 8-point share increase to 6.5 points and included a clause crafted to protect Harrington if its revenues from slots decrease.
If Harrington brings in less than $107.5 million from slots in a year, the state would shave another point off its share of the split.
If the bill passes, all three casinos would kick 43.5% of their gambling revenues to the state. If Harrington falls below the specified earnings threshold, they would have to turn over 42.5% of their revenues.
Licensing fees for the sports lottery franchises also were lowered by the amendment. The original bill pegged the fee at $4.5 million, to be divided among the casinos according to the percent of total state revenue each generates. The amendment dropped the price to $4 million.
The amendment also said the state will have 75 days from the time the bill is signed to negotiate the details necessary to implement table games with the casinos, at which time the General Assembly will consider the proposal.
In previous versions of the bill, table games were to be subject to a study that would determine not only the logistical and regulatory concerns that would come with them, but also hash out a revenue split that would be as favorable to the state as possible.
The amended bill cleared the House and achieved the necessary three-fifths majority needed for passage with a vote of 30-4. Three representatives were absent and four were recorded as “not voting.”
In all, eight representatives switched sides in the vote, including six Republicans and two Democrats who voted “no” on May 5.
Early in the evening, Markell invited some House Republicans into his office for an arm-twisting session.
After his visit with the governor, Rep. Michael Ramone, R-Middle Run Valley, revealed that the Democrats were readying two amendments, one which lowered the split for Harrington and kept everything else practically the same, and another longer amendment that went into greater detail regarding the split and table games.
Ramone said he was confident that the two amendments could be reconciled.
Casino executives and lobbyists, who camped out in a conference room on the first floor, said they were kept mostly in the dark as the negotiations developed between the governor’s office, the House Democratic leadership and the Republicans.
House Minorty Leader Richard C. Cathcart, R-Middletown, said he “drew the short straw” and was charged with updating the casinos when an agreement was reached.
“It wasn’t pretty,” Cathcart said of the group’s reaction to the compromise.
After the vote, Denis McGlynn, president and CEO of Dover Downs Gaming and Entertainment, said he was not satisfied with the new bill.
“This bill is as bad as what the governor proposed, it just shows you can’t negotiate with this governor,” he said.
McGlynn added that the legislators and Markell have failed to understand his industry, and derided what he called their “ignorance” on the issue.
In a brief press conference after the vote, the governor called the bill an “important step” in the budget process.
“I’m grateful to the bipartisan leadership of the House and their caucuses,” he said. “It was a good effort, a lot of work, and here we are.”
Cathcart said it was vital that the bill be sorted out before the weekend so the Senate could begin considering it this week, and pass it before the Joint Finance Committee begins its budget workshops on Monday, May 18.
“We all realized we don’t have until June 30 to get there because the Joint Finance Committee will start to meet, and before they start their work we need to know what the revenues are going to be,” he said.
The governor said the compromise should bring in an estimated $52 million in revenue for fiscal year 2010, down from the $55 million his original proposal was projected to generate.
However, the accelerated timeline for table games may help, he said.
“We actually believe once we get table games implemented later in the year it should generate a bit more. We’ll end up at that $55 million mark,” he said.
Even though the administration seemed to give up the most ground by accepting an accelerated timeline for table games, Markell said he is certain the state will have enough time to work out its ideal revenue split.
As early as Tuesday night, the governor said the state would need six to nine months to get table games up and running.
“From the beginning we just wanted to make sure we were going to do it right, and we’re going to do it right,” he said. “What we’ve accelerated at the front end is what the business relationship ought to look like, but certainly table games aren’t going to be started one month, two months or three months after the bill is signed.
“We’re going to get the smartest people in the world who really understand this.”
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