Delaware casinos can finally breathe a sigh of relief, as tax relief is on its way. The states three racinos have been struggling for some time, asking for lawmakers to assist. Finally, after nearly a decade of requests, their requests have been answered. On Thursday last week, the state senate based a bill that outlines a reduction in taxes for the gambling operators.
Tax Rate Dropped for Delaware Casinos
The bill guarantees that the tax bill for the casinos will be reduced. Taxes on slot machines will be dropped by one percent, from the current 43%. However, table games will not be taxed at 15%, a drop from the current 30%. Racinos in the state have been around since the 1990s, when slot machines were legalized at race tracks. Since then, the tax rates have slowly been increased, making things more and more difficult.
Due to increasing taxes and increased competition from neighboring states, gambling operations in Delaware have become unsustainable. This is bad news for the industry, which employs around 3000 people. The only publicly traded casino in Delaware, Dover Downs, reported that it lost over $1 million in 2017. However, the casino had to pay $75 million in taxes to the state.
Delaware Casino Strangled by State Taxes
It’s clear that when a casino loses a million dollars but has paid $75 million in taxes, something needs to be done. The CEO of Dover Downs went before the state to plead his casino, reminding everyone that the casino industry has generated around $4 billion in taxes. However, if nothing is done, there will no longer be a casino industry to help support the state budget.
Lawmakers responded quickly and passed the bill providing tax relief by a 35-4 margin. The new bill will undoubtedly assist in making the casinos profitable once again. In addition to this, Delaware has legalized sports betting, which will hopefully further assist the gambling industry.