Two of Delaware’s racetracks are in the top ten US racetrack casino markets, and only a racino in West Virginia and another in Rhode Island make more revenue. The first racino opened in Delaware in 1995 and the current three operating racinos contributed $196.26 million to the state and local governments in 2004. The success of the racinos has brought fatter racing purses to Delaware, which in turn has brought more horses, trainers and bigger race cards to the state. 11% of racino revenue goes to race prize money, a total of $62 million in the last fiscal year that ended 1 July.

The three racinos have brought many advantages to Delaware’s horse racing industry but there are clouds on the horizon. Most of the people who come to play the slot machines are from out of state, many brought by tour buses from Maryland. With the Governor pushing to legalize gambling in Maryland, possible future competition from there could mean that Delaware sees a cut of up to $85 million in racino revenue. It is already estimated that when Pennsylvania opens its 14 slots parlours and racinos the Delaware revenue will fall by as much as $35 million.

Some steps have been taken to minimise the effects of future competition. Dover Downs, for example, has built a hotel to help retain its high spending players. Lobbying has started for the legalization of sports betting in the state, a move that could be expected to bring more players to the three racinos. However, so far the Delaware Governor is opposing efforts to increase gambling in the state. It remains to be seen whether a decrease in the fortunes of the racing industry and a cut to state revenue alters the Governor’s mind if competition from Delaware’s neighbours starts to bite. (E-08.18.05)

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