The Lottery and Gaming Study Commission = The Fix Is In to Bail Out Casinos
This study commission — created when the GA and the Governor decided to help improve the balance sheets of our local casinos who are being hurt by rising costs (who isn’t, really?) and by a failed competitive stance in a market where we are surrounded by a glut of gaming options. This Commission met for the first time on Tuesday — and tell me if you can spot why I think the fix is in:
The nine-person commission consists of legislators from both sides of the aisle, a member from the Delaware State Chamber of Commerce, Delaware’s Secretary of Finance Tom Cook, and Alan Levin, director of the Delaware Economic Development Office.
“Our goal has got to be to be able to ensure that we can give the casinos the right tools to stay competitive in this environment,” said Secretary Cook, chairman of the commission.
OK, that was too easy, but Why Oh Why are *we* giving “casinos the right tools to stay competitive in this environment”? Not one of these people runs a casino or has any casino expertise. But if you look closely at this group, they do have the expertise to ensure that an industry that can’t figure out how to make enough money for its shareholders can get there using your tax dollars. And there’s more:
The purpose of the commission is to discuss the marketplace both in-state and out-of-state, as well as various marketing efforts and the revenue distribution to video lottery, sports lottery, table games and internet gaming.
“If we were just to sit on our hands and not do anything, there would be a number of people in the state’s economy that would be affected,” Secretary Cook said.
You don’t have to sit on your hands — just get out of the way. Let a few other venues open up in more geographically competitive areas in the state and let the market sort it out. This is also way easier than living through this group of Study Commissioners going through the motions of studying in order to pronounce the pre-ordained solution of giving casinos more money. But when the fix is in, the fix is in. Senator Bushweller weighed in on this in today’s NJ — via Delaware Voice column (no link as of this writing) — making the argument that the revenue share on casinos was raised as part of a larger scale effort to triage the State’s budget during the crash. He claims that all of the drastic revenue raisers have been largely restored, noting that:
We restored the 2.5 percent employee pay cut and then, in addition to that, gave the employees two raises totaling 3 percent.
Is this true?
In any event, Bushweller wants to make the case that since the state has largely normalized the cuts and revenue raisers, it should do so now for the casinos. Because 1500 jobs depend on it. He forgets to make the case that having the state protect a monopoly has some value, and taxpayers should get that value.
He does ignore that those 1500 jobs depend *more* on their employers being able to compete in a market that they had more than adequate time to accommodate. How will these casinos benefit if/when internet gaming comes on line? There’s alot of questions about this, and it seems that we should know what the financial deal is here before rushing to throw more money at casinos. But protecting jobs in an industry whose client base has been reduced (but not completely gone) doesn’t make any sense. Because if revenues don’t support these jobs now, they won’t be there for very long in the future — no matter how much state money is on the table.
There are plenty of problems in the State of Delaware that could use some focused attention. How about making sure that public schools work? We’ve spent a good deal of time making sure that charters have carved out a privileged space to operate in, how about spending time on those schools where the rest of Delaware’s children go to? Or how about some focused attention on making sure that the Port of Wilmington has what it needs to keep its clients AND can accommodate future expansion? Both public schools and the Port have the advantage of being public assets, so State oversight, planning and management adjustments is well within their own purview. But here we are — getting ready to throw money at an industry that isn’t going to operate at previous peaks.
Tags: Delaware Casinos, Featured
One of the rough things about capitalism is that not everyone succeeds, not every business succeeds. A lot of businesses fail, and really most of them fail, though that “most” really means very small businesses.
Are casinos somehow too big to fail? I don’t think that they are, or that they should be. If one is going to fail, then let it fail!
Casinos were somewhat of a mirage. States kept looking at all of the money Nevada was making, when it was the only state with legal gambling. Then Atlantic City got in the action, and AC made a pot of money — though at the expense of letting their beaches go to crap. Other states got in, and, not-so-amazingly enough, Atlantic City’s previously protected casinos started seeing revenue drops.
Now there are casinos all over, and none of them are doing spectacularly, because there are too many players in a market they never analyzed under a truly competitive system. They miscalculated, and as far as I am concerned, it ought to be their problem, not the government’s.
It might be wise to remember that we started off this legislation session trying to sell off our port because we couldn’t afford a hole of $1 million a year. We ended the year agreeing to subsidize racinos $8 million for as far as the eye can see.
Bottom line, money isn’t everything. Throwing away great jobs for $1 million, then giving $8 million with no guarantee that any of it goes to one single job, simply shows you help out those whom you know at the top, and kick the teeth out of those on the bottom.
Though it is too early to say, that appears to be the legacy of this administration. After all, a port has far more long term economic value to a state than a racino.
Has anyone asked why we didn’t first hire consultants to search out a buyer for the racinos?
Corporate Welfare never, ever works. There may well be a temporary gain but in the long run it’s a waste of tax payer money. Same for the statement that more casinos should be allowed, more casinos at more locations will not work and will add more political pressure for more state money. I’m all for letting capitalism take it’s toll on the current three locations, I watched the bottom fall out in Atlantic City and this will be no different.
the buyers for the racinos walked away as they knew it was a losing proposition
they seem to be smarter than the administration
The easiest way to attract people to your casino over others, is to pay out more often
Problem is Kavips, is that minimum and maximum is set by law…. 😉
As far as the slots go
So, therefore it’s self limiting
Aoine,
Kavips has a valid point. Better payouts might (not will, but might) make a difference.
Yes, if the minimum and maximum payouts are set by law, but there’s no reason the law can’t be changed.
Funny, though, that I’ve never heard the racino operators suggest that better payouts might attract more customers.
Throwing money at the Casinos guarantees state jobs for a bunch of losers, like ones who take extended lunch breaks on the taxpayers dime who couldn’t get a job in any other industry,
If you believe in the ‘Free Markets’ then the casino business at Dover Downs would fail in an non-subsidized competitive (fair) free market system. Markell’s $ 7 million gave the ‘vendors’ a pay increase to provide pay raises to the food, slot machine VENDORS and ect. – not to the employees or the workers. Ironically, DEDO Alan Levin and Educational Zar Markell was WILLING to sell our ‘net profit’ port for pennies on the dollar but found $7million for the casinos in less than 1 week. This is $7million of taxpayers’ money taken away from the general fund. The casino market is flooded and unsustainable in contrast to the Port of Wilmington whose economic impact value is estimated at $1.6billion and supports 26,000 jobs that pay ‘ living wages’ (thanks to their union) and has the capacity to grow and expand.
Delaware Liberal, it is still not clear the future of the Port of Wilmington whose DEDO Director, hand-picked Board of Directors (governor Markell) are still pissed off (the zillions their cronies would have made) from not being able to sell of the Port of Energy giant Kinder Morgan. Because they are pissed off, it is unclear whether Dole (biggest) importer of Bananas will stay. They will blame the ‘union’ for not giving into concessions and the union president for being unreasonable and difficult to work with. I say, look to other European companies like Volkswagen who embrace union labor wages. DEDO Director and multi-millionaire, Alan Levin may play union vs. non-union competition (Paulsboro, NJ) plant as the reason the DOLE deal falls through. In any respect, the fruit industry and car import/exports is where the Port is the most value and sustainability not in Natural Gas and Crude Oil exports which is truly a ‘Free Market and Environmental’ catastrophe waiting to implode that has NO LONG-TERM sustainability because of the hazardous substances that pollute the ground water and release toxic gases attributed to climate change.
Close down the Casino in Dover and invest in Solar Energy (Clean and Renewable Energy jobs)-a clean and sustainable market growing by leaps and bounds!!!
Lastly, Democratically Elect the Port’s Board to include labor, business contractors, economists who are well versed in Port Operations and are not hand-picked by the Governor (DEDO multi-millionaire Alan Levin and their cronies) whose interests are not for the Common Greater Good.
We shall see how this plays out as the Governor has 3 more years in office to build his ‘Wealthy Empire’! The Pro Corporate…..Neo Liberal…..Centrist DEMOCRATS are not better than the Moderates in the Republican Party. I would vote for Mike Castle for Governor any day over the Democratic leadership we have now!!!
Scary to Think what is Ahead!! Where is the Outrage!!
The Democrats are part and parcel to the baked in corruption of every aspect of Delaware political class. The democrats will accede to anything corrupt or bad in order to get money for “investments” which is really wasted spending.
“Where is the Outrage!!”
Well, for what it’s worth, I’m outraged by your highly emotional!!! ignorance.
It’s Mike Protack, so what are you going to do?