Casinos in the state of Delaware have sent an SOS message to the state government, saying that they are struggling under the weight of growing competition in the region and requesting immediate assistance. Revenue fell sharply in the Delaware gambling industry throughout 2012, and there is no sign of improvement this year either.
The three casinos in Delaware face stiffer competition as neighboring states continue to open up their own markets, and operators fear that they will soon need to lay off workers if things don’t start improving very soon.
The Governor has not answered the casinos’ call for assistance, beyond an offer to split a one-off $8 million subsidy to the three locations. The Delaware casinos are after much more – they want the state to reduce slots tax from the current 43.5% to 37%, effective immediately.
The governor’s $8 million offer has been referred to by market analysts as “a band-aid to a gunshot wound”. Analysts agree that the best course of action would be to allow Delaware casinos to free up some cash by dropping taxation, so that they can update their facilities to make them more attractive to local players. At present, with no spare cash on hand, casinos are lagging behind in technology and facilities, and players are simply traveling across the border to newer gambling establishments.
Slots revenue dropped a significant $47 million between January and May this year compared to the same period last year, and analysts agree that it will be near impossible for Delaware to mirror the same revenues it generated in the past decade until competition from Maryland and Pennsylvania started to affect finances.
In the meantime, Delaware seems to be on track to introduce online gambling games by September this year. In May, the Delaware Lottery, which is overseeing the new online gambling industry, announced that it had signed with 888 Holdings and Scientific Games to power its new online products.