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Delaware Senate ponders $10M bill to bail out casinos hit by state fees, competition

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DOVER, Delaware — Delaware lawmakers are planning to scrape together about $10 million to bail out Delaware's three gambling casinos, which are struggling with high fees and increased competition from neighboring states.

Much of the money to fund the proposed bailout would come from dollars left unspent from an $8 million casino relief effort that lawmakers approved last year to help the casinos cover anticipated increases in slot-machine vendor costs.

Sen. Brian Bushweller, D-Dover, who is leading the latest casino bailout effort, said Tuesday that $5 million from last year's plan remains unspent.

Another $3.2 million would be drawn from a previous appropriation for a Kent County sports complex project that has been delayed, and roughly $1 million is available from an unspent 2012 appropriation for an economic development infrastructure fund, Bushweller said.

A Senate vote on the bailout legislation, which is supported by Democratic Gov. Jack Markell, had been scheduled for Tuesday but was delayed until Wednesday as bill drafters continued to work on revised language.

Delaware's three casinos have complained for years about competition from casinos in Maryland and Pennsylvania that have drawn away gamblers who used to travel to Delaware. The casinos also are not happy about the share of gambling revenues they have to give to Delaware's general fund.

"The rates were fine during the heyday of the casino business in Delaware, but once the competition from out of state hit, now the rates became too much," said Bushweller, whose district includes the Dover Downs casino. "They're like the straw that broke the camel's back."

Even so, lawmakers have yet to agree with the Markell administration's comprehensive plan to ensure the viability of Delaware's casinos.

"This will be the second year in a row we're doing Band-Aids," Bushweller said.

A study commission led by Markell's finance secretary, Tom Cook, recommended earlier this year that the state split 75 percent of slot-machine vendor costs with the casinos, rather than having the casinos continue to pay the full amount from their share of gambling revenue. The change would cost the state's general fund about $10 million a year.

The commission also proposed eliminating the annual $3 million table-games fee paid by the casinos starting July 1, 2015, and reducing the state's share of table-game revenue from 29.4 percent to 15 percent, at an estimated annual cost of $7.2 million.

The commission's recommendations formed the basis of legislation that Bushweller introduced last month. But the bill is being pared back because lawmakers have little money available after the drafting of operating and capital budget bills for the fiscal year starting July 1, Bushweller said.

The revised bill will call for the state to help pay vendor costs for slot machines, but proposals to eliminate the casinos' annual $3 million table-games fee and to reduce the state's share of table-game revenue will be dropped.

"It doesn't do enough on a permanent basis," Bushweller said of his legislation. "Ultimately, we have to reach some kind of an accord on how we're going to stabilize the casino industry going forward."

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