Table-game tax cut in half; license fee eliminated
After nearly a decade of trying, Delaware’s three casinos finally won tax relief. A compromise relief bill passed by the state Senate on the final day of the session June 30 and signed into law by Governor John Carney three hours later gives an estimated $16.8 million in much-needed tax and fee breaks to the state’s three racinos.
The three racetrack casinos—Delaware Park, Dover Downs and Harrington Raceway—have sought a break in what was one of the nation’s highest revenue tax setups since the combination of the Great Recession and increased competition from adjacent states Maryland and Pennsylvania sent revenues on a downward spiral beginning 10 years ago. For the past five years, a blue-ribbon panel of state officials and casino executives have recommended around $20 million in tax and fee breaks every year, and every year, the package has been voted down in the legislature.
While the casinos did not get the entire $20 million in relief, they got a significantly better break than the $10 million package that passed the state House two weeks ago after amendments to a Senate bill cleared in April.
That original legislation, sponsored by Senator Brian Bushweller, slashed the slot revenue tax from 43 percent to a sliding scale ranging from 32 percent to 43.5 percent, cut the table-game revenue tax in half from 29.4 percent to 15 percent, and eliminated the annual $3 million table-game licensing fee. The House amended the bill to leave the slot tax untouched, with the table tax adjusted to 15.5 percent.
The compromise bill passed by both chambers at the end of the session—the Senate easily clearing the final legislation in a 17-3 vote—slashes 1 percent off the slot tax, leaving it at a flat 42 percent, while eliminating the table game licensing fee and slashing the table revenue tax to 15 percent. It also gives casinos the option to slash the slot tax by another 2 percent by investing in capital improvements in their facilities.
“The casino industry is the No. 1 private employer in Kent County, and the bill helps ensure that remains the case, that all those thousands of employees, subcontractors and their families will breathe a little easier,” said Bushweller, according to the Delaware State News. Bushweller represents the state capital of Dover in Kent County.
The fourth time was a charm for Bushweller, who sponsored tax relief bills in 2015, 2016 and 2017. Operators of the casinos have said that layoffs would be likely without the tax relief. Dover Downs, the only public company among the three, reported losses of nearly $1.1 million last year.
Combined, the three racinos employ around 6,700, including 2,200 horse-racing jobs.
“It’s been a long time coming, but we’re relieved it’s finally here,” Dover Downs President and CEO Ed Sutor told the newspaper. “We’re going to live up to our end of it; we’re going to make capital investments, we’re going to make additional marketing expenses, we’re going to try to drive additional business to the state of Delaware.”
