Top Democrat says reports are biased.

Delaware’s casinos released reports from two consultants Dec. 15 meant to bolster their assertion that additional gambling venues would be bad for business and hurt the state as whole.

A market analysis prepared by Deloitte & Touche for Delaware Park, Harrington Raceway and Dover Downs Hotel & Casino says new casinos in the state would “further cannibalize a decreasing market.”

The Deloitte report says new casinos in Pennsylvania and Maryland will cut off the flow of gamblers who come to Delaware from other states, since they’re more likely to patronize casinos close to home.

Accompanying the analysis were the results of a telephone survey showing 59% of Delaware voters oppose the establishment of additional gambling sites.

That report, produced by Washington, D.C., pollster Momentum Analysis, also found 52% of those surveyed think three casinos is enough for the state.

Casino executives said they commissioned the reports to demonstrate that additional venues are not a good idea.

However, some argue the casinos’ decision to release the reports when they did represents an effort to get ahead of a similar study set to be reviewed in the coming weeks by members of a special state committee.

Under the same legislation that authorized sports betting, the General Assembly created a Video and Sports Lottery Study Commission charged with preparing a report on the possible effects adding more casinos would have on the state tax revenues, the job market and casino profits.

By the end of this month, the commission is scheduled to receive the results of an independent analysis conducted by TMG Consulting at the panel’s behest. That report will form the basis of the commission’s report on the issue, which will land on the desks of state legislators when they return to session Jan. 12.

A second opinion

Dover Downs CEO Ed Sutor said the casinos decided at the outset to gather their own collection of data and information for the commission’s consideration.

“We were concerned about the possibility of other casinos in the state and we’ve been attending the commission hearings for the last several months,” Sutor said. “We offered early on to provide information to the commission and they said yes, so we sought out an independent, well-renowned gaming expert to take a look at the situation.”

House Majority Leader Rep. Pete Schwartzkopf, D-Rehoboth, sits on the study commission and said the casinos’ reports are not a constructive addition to the panel’s work.

He said the materials, particularly the voter survey, are meant to “intimidate” the senators and representatives on the commission and cloud their interpretations of the forthcoming TMG report.

“They’re basically trying to influence the committee in a decision that we’re not even going to be making,” he said.

The casinos, he added, also are feeding a misconception that the commission will vote up or down on additional venues.

“The job of the committee was to pick an independent consultant and produce a report, it wasn’t to make a recommendation for or against,” he said. “I believe there are some people that think we’re going to take a vote on this panel as to whether or not to approve.”

Sutor said he and his colleagues commissioned their own studies to counter whatever bias might be inherent in the state’s analysis.

“We wanted to provide this information to get a fair and balanced look by the commission,” he said. “They hired TMG to give them information and we hired Deloitte & Touche. They provided, I think, a fairly strong report indicating what we’ve been saying all along.”

Commission chair Dennis Rochford said it will be up to each individual on the panel to decide how much stock to put in the casinos’ material.

But, he said, the TMG report should carry the most weight.

“We obviously are going to take a hard look at TMG and I would suspect that individual commissioners would look at what the gaming industry has,” he said. “What’s going to drive the commission is the TMG report. That obviously is the primary document for the commission, that clearly will be the jumping off point.”

Consider the source

Schwartzkopf said he takes any information from the gambling industry with an ocean’s worth of salt.

“This is a study that was commissioned by three casinos that don’t want any other competition and they want the government to continue to protect them,” he said. “They commissioned this study; they paid for it. I would be surprised if they got any other results than what they got.”

A stalwart supporter of the Del Pointe casino and resort project planned in Millsboro, Schwartzkopf isn’t exactly neutral on the subject either, but he defended the commission’s process and due diligence in selecting a consultant and providing detailed parameters for a report.

He also said the casinos’ study doesn’t have that same level of detail.

“I don’t think it was a very complete study and I don’t think it was a comprehensive study,” he said.

The Deloitte report focused on the market outlook for gamblers living in within 30, 45 and 60 minutes driving time of a Delaware casino, where it says most of the state’s gamblers come from. More casinos planned in Maryland and southeastern Pennsylvania will infringe on those arcs and dilute the ratio of gamblers to casino seats.

Schwartzkopf says the model doesn’t account for the millions who travel to Delaware’s beaches each summer — prime traffic for a casino in Millsboro.

“There was a lot of weight given to people who live in a 60-minute radius, does that take in the beach market? No,” he said.

But Deloitte Vice President Jason Burgess, who helped prepare the casinos’ report, said the analysis does account for Delaware’s beachgoers.

“The largest markets for tourists were Philadelphia, Baltimore and Washington, D.C. We already capture the biggest market areas for tourists in our drive times, they’re one in the same,” he said.

“The tourism aspect was an issue, but when you dig down, a good chunk of the tourists come from markets these guys are already tapping into.”

Schwartzkopf also said the telephone survey was intentionally slanted to give the casinos the results they wanted.

Specifically, he pointed to the last portion of the survey, a series of statements respondents were asked to rate as “very convincing,” “somewhat convincing,” “not too convincing” or “not at all convincing.”

A script provided by Momentum, the pollster, included the following sentences:

 “More casinos would mean Delaware might become like Atlantic City, and we’d lose what is so nice about living here.”  “Taxpayers will have to foot the bill for the new infrastructure needed for more casinos, like new roads.”  “More casinos wouldn’t create the kinds of manufacturing jobs Delaware really needs.”  “Places like Atlantic City were promised economic recovery if they built more casinos. But that didn’t happen, and Atlantic City is still troubled. Bringing multiple casinos to Wilmington will lead to the same broken promises.”

Those lines, Schwartzkopf argued, put a particular image in the survey participant’s mind.

“Everybody knows the results of the poll are related to the way the question is asked,” he said. “It’s very obvious that the questions were for the most part negative against new casinos and trying to lead people into saying no.”

Momentum President Margie Omero defended the survey and said the questions did not come from the casinos, but rather from a focus group of participants who were asked simply to share their thoughts on the additional casinos issue.

After establishing a baseline for public opinion, Momentum drafted questions to test it.

“We work on it to come up with something that is a good question and a solid question that finds out what we want to find out, and is true of what we know about the public opinion,” she said. “A lot of questions came from voters’ own words.”

She also said the statements participants were asked to evaluate came at the end of the survey, after their opinion on the subject had been established.

“Those statements are to see what is behind the opposition, why they oppose,” she said. “It’s not meant to be a standalone symbol of opposition, it’s to explain.”

Dover Sen. Colin Bonini, one of two Republicans on the commission, said he thinks the casinos’ reports are valid and represent a good faith effort to provide more information on the subject.

“The casinos are absolutely allowed and encouraged to put this information out there,” he said. “And my guess is it’s legitimate.”

As for how much the Deloitte report, the survey or the TMG report will influence the General Assembly’s ultimate decision on additional casinos, Bonini has no illusions.

“The bottom line is, the expansion decision is going to be a political decision,” he said.

Next meeting
Video and Sports Lottery Study Commission
9:30 a.m. to noon, Tuesday, Jan. 5
Joint Finance Committee Hearing Room, Legislative Hall, Dover

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