Panel says no new Delaware casinos

Jan 13, 2010 6:48 PM

Delaware’s gambling commission voted against adding any new casinos, despite the results of a study that determined two new venues could boost overall revenues and add jobs.

The Sports and Video Lottery Commission’s vote on Tuesday follows the release of a market analysis conducted for it by New Orleans-based TMG Consulting. The General Assembly had mandated the study in June.

The TMG study determined that adding two new venues would maximize the state’s tax revenue and would not drive the three existing racetrack casinos out of business, although revenues at the venues would decline.

Several lawmakers insisted that any financial harm to the existing racetracks was unacceptable, even if job losses there were compensated for with new jobs at new venues.

"I think there are some things wrong with the study," Rep. Clifford "Biff" Lee, R-Laurel, who is a member of the gambling commission, told the News Journal.

Five of the six lawmakers who served on the gambling commission voted Tuesday morning to add a contradictory footnote before submitting the study to the Legislature on its first day: The footnote the commission made to the study made clear that the report was released as required by the law passed by the Legislature last spring.

But the footnote added "the Commission further concludes that it opposes the de facto finding in the report that would recommend two additional video lottery facilities, due to the potential job losses, not withstanding any net job gains, the potential damage to the horse racing industry and destabilization of the three current video lottery facilities."

The only lawmaker on the commission to vote in favor of releasing the study without an addition was House Majority Leader Pete Schwartzkopf, D-Rehoboth Beach, who is in favor of a proposal to build a casino in Millsboro.

Other commission members voting with Schwartzkopf were acting Finance Secretary Tom Cook, Alan Levin, director of the Delaware Economic Development Office, and Dennis Rochford, who chaired the commission.

The commission’s position surfaced just before the General Assembly reconvened for the second leg of its two-year session. One of the many issues left incomplete at the June 30 adjournment was how gambling should be expanded in the state to meet competition from Maryland and Pennsylvania.

The legislature approved the addition of table games, but did not agree on how table games would be run and regulated. The debate over adding more gambling venues will likely simmer while lawmakers first consider passing regulations for the addition of table games, said Brian Selander, spokesman for Gov. Jack Markell.

After taking office, Markell proposed adding up to three new venues, but backed down after strong opposition from the casinos. As a compromise, he agreed to the study. The gambling commission hired TMG Consulting to do the assessment.

"The Governor still believes additional venues may be viable but the specifics in terms of location, business relationship with the state, effect on existing venues and other issues would need to be resolved," Selander said in an e-mail to the News Journal.

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