An industry group representing Delaware's three casinos is asking state lawmakers to revise revenue-sharing models so that the casinos can remain profitable amid increasingly intense competition from casinos in other states.
The top priority for the Video Lottery Advisory Council is returning to a tiered rate structure for slots revenue, with the state's share fluctuating based on the amount of revenue taken in. When business is down, the casinos would pay a lower rate. When business is up, the rate would increase.
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Ed Sutor, CEO of Dover Downs and chairman of the advisory council, said that change alone could prove to be the long-term solution for Delaware's casinos, which have perennially asked lawmakers for financial relief in recent years.
Casino representatives on the council also voted Thursday to ask that the tax rate on table games be revised, either by lowering the rate or by subtracting half the revenue to help casinos cover payrolls for the labor-intensive games before distributing the remaining money among the state, the casinos and the horse racing industry.
Sutor said the current effective tax rate on table games approaches 40 percent. The casinos are recommending a 15 percent rate.
"Delaware by far has the highest table game tax rate in the country," Sutor told council members.
Other proposals discussed by the council include having the state share in paying all vendor fees for slot machines before revenue is distributed. Lawmakers voted earlier this year to have the state share in 75 percent of slot vendor fees before distributions are made.
Representatives of the horse racing industry are opposed to increasing the state share of slot vendor fees or earmarking half of table game revenues for casino payrolls because those moves would mean less money for the horsemen.
The council also voted to recommend that casinos be given credits for capital expenditures and marketing initiatives.
The council will finalize its recommendations in a report to be submitted to state officials next week.