Delaware Report Suggests 'Three Is Enough'

Delaware racetracks oppose the addition of casinos in the small state.

As the Delaware government awaits the results of an independent study into the expansion of casino gambling in the state, a study commissioned by three racetracks concluded the addition of casinos “will only cannibalize an already declining market.”

The study by Deloitte and Touche, an international research and consulting firm, was done on behalf of Delaware Park, Dover Downs, and Harrington Raceway & Casino. It's dated October 2009 but was made public recently. The three tracks are part of a campaign called “Three is Enough,” a coalition that opposes casino expansion in Delaware.

As part of a 2009 law that authorized sports betting and table games to go along with video lottery terminals that began operating in late 1995, the Delaware legislature formed the Video and Sports Lottery Licensing Commission, which is studying a possible expansion of gambling in the state. The commission’s study could be released in early January 2010.

The track-authorized study notes the three tracks have a combined 8,000 VLTs, and after a “strong period of growth, the performance of the Delaware casinos has been declining since 2007.” The report, citing figures from the Delaware Lottery Commission, states that for the 12 months that ended June 2009, casino “win” was down $44 million, or 7.1%.

Delaware Park, the only Thoroughbred track in the state, took the biggest hit at 10.3%, the report states.

There have been proposals for two new harness tracks with VLTs in southernmost Delaware, as well as discussion of non-track casinos near Wilmington in northern Delaware.

The Deloitte report cites existing gaming competition in New Jersey, Pennsylvania, and West Virginia, as well as impending competition in Maryland. It states Delaware gaming parlors heavily rely on out-of-state business, and “in-state demand is significantly below the current operating levels of the three” racetrack casinos in the state.

The introduction of table games in neighboring states would negate a competitive advantage, the report states.

The 2009 law reduced the amount of VLT revenue that goes to Thoroughbred purses from 10% to 9% and Standardbred purses from 12% to 11%. For the first 11 months of 2009, VLTs have generated a combined $56 million for purses at the three tracks, according to Delaware Lottery Commission statistics.

Parlay-style sports betting produced net proceeds of $678,972 in November, the lottery commission reported. That’s twice the figure for September, when the games were launched.

Purses at the three tracks earned $162,831 from sports betting, $105,836 at Delaware Park, which attracts the most play. The state and tracks greatly reduced revenue projections after a court limited the type of games that can be offered.

Delaware Park and Dover Downs have reported wagering on horse races has increased somewhat on days when sports book business is brisk.