Del Pointe project beneficial for Del.

Dear Mr. McGlynn,

I would like to respond to your recent op-ed regarding additional gaming venues in Delaware. As chairman of Dover Downs, you have a fiduciary responsibility to do what is best for your shareholders so I certainly don’t blame you for your attempts to thwart competition. I’m not sure, however, that the aggressive tone you took in the op-ed was necessary or constructive. I certainly don’t appreciate being called a "clueless wannabe" or an "interloper."

As Gov. Markell pointed out, the gaming franchise in Delaware belongs to the Delaware taxayers. Therefore, Del Pointe should only be granted a gaming license if Del Pointe will benefit the state and its citizens. I clearly think the revenue and jobs Del Pointe will create is beneficial to the state but I am biased, as are you, on this issue.

In your op-ed you challenge the credibility of our statements. On the House floor a couple months ago, you made the statement that if HS 1 to HB 100 passed (as it did) both Harrington and Dover would soon go out of business. I was told by several legislators that you made a similar comment at Leg Hall in 1994 regarding the proposed gaming tax rate; stating that no racetracks would install slot machines with such an onerous tax. How credible were these statements?

You refer to the population of Delaware being too small to support additional gaming venues. Delaware’s population is irrelevant as there are no barriers requiring people to only gamble in their home state. What’s more relevant is that Delaware is within a few hours drive of 50 million people. A customer base that Delaware is now uniquely positioned to capture given the addition of sports betting and soon, table gaming.

Perhaps more important is that Del Pointe is geographically positioned to not only minimize the cannibalization effect on existing Delaware racinos but to attract out-of-state tourists from our beach market. Gaming studies, including 1998’s "The Regional Economic Impacts of Casino Gambling" by Adam Rose & Associates, have shown that the economic benefit of a casino is greatest when the clientele is comprised largely of tourists. By not locating a casino near our largest tourist market, Delaware taxpayers are leaving a lot of money on the table, not to mention depriving Sussex County of a much-needed source of jobs.

You are correct in stating that increased gaming in surrounding states poses a threat to Delaware’s gaming revenue. One threat in particular is the casino proposed in Ocean Downs in Maryland. Without Del Pointe, our beach tourists will spend their gaming dollars at Ocean Downs. Del Pointe is a perfect opportunity for Delaware to defend against this competition and ensure the gaming revenue from our beaches goes to support Delaware and not Maryland.

Our statements regarding the impact Del Pointe will have on Delaware were not based upon mere conjecture but were the result of a third-party market study conducted by a very reputable company with numerous years of experience analyzing gaming markets: the Sage Policy Group. The study made the following conclusions:

•The project would support 6,000 jobs (annual job equivalents) during construction

•The project would produce $75 million in annual state revenue

•The project would recapture gaming revenue that would otherwise be lost to the Ocean Downs facility in Maryland

•The project would support 5,762 permanent jobs (direct and indirect effects) upon completion

•The project would enhance Sussex County’s leisure and hospitality appeal

•The project would provide a one-mile standardbred racetrack; a length much preferred by horsemen over the half-mile and 5/8-mile tracks at Harrington and Dover

Mr. McGlynn, I respect you for the success you have achieved at Dover Downs and I realize that you are only trying to maximize the profits of your company, but this issue is bigger than both you and me. What matters is what is best for Delaware. Only the citizens of Delaware and our elected legislators can make that decision.

So Delaware, here’s the question ... Do you really want to deregulate gambling in the First State so that every out-of-state developer who says he needs a casino to support his "proposed" commercial project gets a casino?

Certainly, the Harvard-educated Californian behind the Del Pointe project doesn’t think Delawareans are that dumb ... or does he?

When the legislature passed the Delaware Horse Racing Redevelopment Act in 1994, it knew that future interlopers would attempt to expand gambling beyond the three existing venues in Delaware where gambling had been confined for 50 years or so. The legislature’s intention to limit gambling to the three historical racetracks was clear and the law was written accordingly.

It was under this set of ground rules that the three tracks invested hundreds of millions of dollars in facility improvements. In the case of Dover Downs, $275 million has been invested and, by the way, we still have $100 million in current debt related to the many improvements made at our gaming facility.

As a result of these investments, the three tracks now employ more than 3,100 people and since 1994 have generated $2.3 billion for the state’s General Fund. None of us anticipated that the rules would change so dramatically after having made such financial commitments and taken on such significant debt to protect this enterprise and its stakeholders, the biggest of which is the state.

Now, with the promise of a paintball farm, a movie theater and 6,000 jobs everyone wants to follow the pied piper from California. Hey, let’s give 100 developers casinos, that would be 600,000 jobs! But wait ... is anyone, particularly this legislature, going to write into the law that, if Del Pointe proceeds it MUST build all those things they’re promising and deliver all those jobs? If that’s the basis for giving them the go ahead, then their license should be denied if they don’t deliver, right?

Now, on the heels of Del Pointe, we have a casino proposal for Delmar. Soon one, two or three proposals will emerge for the Wilmington area ... more "unserved markets" to accommodate. More "family entertainment" for everyone! Who doesn’t want the First State to become the next Atlantic City?

The current administration takes the position that the "market should decide" how many casinos Delaware should have. While this is a great sound bite, it ignores the reality that the casino industry in Delaware is highly regulated and functions more like a utility than anything else.

They certainly don’t operate in a free enterprise environment. Every aspect of casino operations is controlled by the legislature or the Delaware Lottery Office. If we’re going to let the market decide things, then let’s open up public utilities to free market conditions.

How many gas companies, electricity and water suppliers will the "market" accommodate? Who cares if none of them can make enough to cover their infrastructure investments. As the developer behind Del Pointe has said, "that’s not the right question to ask in a capitalist society."

Some say Delaware’s three existing casinos have a monopoly. The fact is, in one of the most highly concentrated gaming markets in the country, the three Delaware casinos compete not only with each other, but also with an ever-growing number of casinos in surrounding states where much larger populations can support such expansion.

Delaware already has more casinos per capita than New Jersey or any other state in the East and none of Delaware’s three casinos has gotten close to needing the full complement of slot machines authorized under current law.

Those interested in "market demand" should think about that. And one has to wonder how it helps Delaware’s position to add more competition from within the state at a time when all three existing venues are attempting to fend off surrounding states while coping with the nation’s smallest population, the second highest slots tax rate, and considerable debt obligations.

It’s easy for those who don’t know or care to understand our industry to ignore the realities of our business and chase the careless promises of clueless wannabes who think that all that glitters is gold. But Delaware, you should know better.