Is the Casino Industry in Trouble?

Is the Casino Industry in Trouble?

From Delmar to Middletown, Bombay Hook to
the Brandywine, Dover to Wilmington this is
the Caesar Rodney Institute Policy Podcast.
Today CRI communications director, Sam Friedman,
talks with Ed Sutor, President and CEO of
Dover Downs about the future of Casinos in
Delaware. Here’s Sam. (Sam) Mr. Sutor, talk
about the end of the session when you were
looking for some relief for Delaware’s casinos,
and you didn’t get any. What did you think
when the budget came through, and there was
nothing done for the casinos? (Ed) Well obviously
we were very disappointed. The industry’s
issues and even suggestions from legislative
committee were never addressed, and that’s
put us in a very very difficult position.
We’re going to try to do everything we can
to survive, but it’s not going to be pretty.
In the first half of the year we are already
down about 72 positions. These were difficult
decisions to make, but we have to look at
the lowest performing pieces of our operation.
We also cut back on restaurants, closed our
deli recently. We have to look everywhere
we possibly can to save money. (Sam) What is
it in the legislature, in your opinion, that
is keeping them from basically doing what
you believe is needed to be done to help the
casinos but especially Dover Downs? (Ed) Personally
I believe that they only react to what’s directly
in front of their face, and they were challenged
by a deficit for most of the legislative period.
They didn’t look over the longer term. They’re
considering… DEFAC, which projects how much
money they have to spend, includes $160 million
next year coming from the three Casinos. I
can tell you that number is too high based
upon us not getting any relief. We have to
cut back on our payroll, and we have to cut
back on our marketing; if I do either of those,
it will cut back revenue. For instance, cutting
back the graveyard shift, there’s 24 positions,
that’s over a million dollars a year less
in revenue we’re going to receive from that
area, and the state gets almost 450 thousand
just from that. So this is… we’re in a downward
spiral. (Sam) I got a card in a mail from
a group which is one of these groups that
opposes casino bailouts, you know, where’s
my relief? And it shows these faces. What
is it about this issue that, in your opinion,
maybe people don’t understand that they think
that any relief for you is a bailout and it
makes them so strongly opposed to it? (Ed)
Well some of the people who are opposed to
gaming in particular or have another agenda
they want another casino up in Wilmington
or Sussex County label this as a bailout,
and that has bad connotations. It’s not a
bailout it’s the state, the general partner
in this deal, has raised the amount that they
take out of the pot seven times. We’re now
at some of the highest tax rates in the entire
country. How many businesses out there could
survive if 62% of their revenue was taken
away and they had to operate their business
on 38%? It’s a shame, but our people who don’t
like us use that term “bailout” often, and
it’s incorrect. (Sam) Going forward with the
challenges, what specifically will affect
Dover Downs even more maybe than the other
two casinos? (Ed) Dover Downs has the worst
location, the other two locations are better
you’re coming from New York or Philly, you
go past Delaware Park to get to Washington,
Baltimore, you go past Harrington. So we have
the worst location of the three, however what’s
really bothering us is that we have some other
expenses coming down the road next year that
we cant do anything about. Obamacare and our
health costs are going through the ceiling.
The city of Dover has already announced the
electric rate increase will cost us about
75 thousand a year plus the real estate tax
increase will cost 65 thousand dollars a year.
The state has passed contracts with the slot
vendors that’s going to cost us another million
dollars a year. We can’t control that, the
only things we can control are payroll and
our marketing, and when we start cutting too
deep into those then the revenues fall, and
all three parties lose: The state, the casinos
and the horsemen. (Sam)Thank you so much for
joining us, Mr. Sutor it’s a tough issue,
but I appreciate you taking the time to speak
with me. (Ed) Hopefully the next call it will
be better news, but right now we’re hunkering
down. (Sam) Ed Sutor, the President and CEO
of Dover Downs. You’ve been listening to the
Caesar Rodney Institute Impact Delaware Policy
Podcast. Visit our website
for more news and info on policies affecting
you. Don’t forget to click that subscribe
button to follow us on YouTube. I’m Sam Friedman
thanks for listening and have a great day.

2 thoughts on “Is the Casino Industry in Trouble?”

  1. Sell the "Yaughts" and take a pay cut ? What about you giving a little ? When you were rolling in the Dough who did you think of ? Now..that is a Question Aye Folks ?

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