In yesterday’s Budget Address delivered by Delaware Governor Jack Markell he commented that these are difficult times that demand difficult choices. The revenues that pay for the services provided by Delaware’s state government have been hard hit at time when the services are needed most, and the resultant budget shortfall of US$750 million is bigger than anticipated. “Our plan relies mostly on cost cutting, but it does raise revenues. It is not perfect, and there are many elements of it that I would prefer not to have to propose. But I believe it is a responsible and reasonable approach to a historic challenge.”

The Governor stated that to solve the budget shortfall the government would demand fiscal responsibility, exercise compassion by keeping core commitments and ensure shared sacrifice. It is proposed to reduce spending by US$331 million, reallocate special funds by US$40 million and leverage US$155 million in federal stimulus funding. US$55 million is expected to be raised by re-authorizing a sports lottery and getting a fair deal for residents.

A 45 cents per pack rise in cigarette tax should raise an extra US$37 million over two years, and a 50% increase in alcohol tax will generate US$9.5 million over the same period to fund the Children’s Health Insurance Program. Jack Markell went on to say, “There is another way to generate revenue. It does not come from raising taxes and it helps solve our shortfall without making cuts to our core services. It also will put people back to work, which is critical. I believe the time has come for Delaware to reauthorize a sports lottery.”

He added, “Specifically, I am proposing that we re-authorize a sports lottery at the three existing racinos; extend that opportunity to up to 10 other venues such as sports bars and entertainment centers; and add up to three more casinos, which would also feature sports betting and video lottery machines. I am also proposing we increase the state’s share of video-lottery revenue by eight percentage points, giving Delaware a fairer share of proceeds. The revenue for these existing venues has grown well beyond original expectations. Delawareans deserve to capture a fair share of the total proceeds from the exclusive licenses it provides to video lottery venues.”

The Delaware gaming industry’s delight in finally getting support from the government for legalised sports betting will be tempered by concern over additional competition from three more casinos and a hike in gaming tax from 37% to 45% in May. Markell argues that the higher tax would bring Delaware more in line with neighbouring states and that sports betting is something those states will not have.

In 1992 the Professional and Amateur Sports Protection Act banned sports betting in all states except those that already allowed it in some form. Only four states are exempt from the ban and Delaware is one of them. The others are Nevada, Oregon and Montana. Delaware tried a sports lottery in 1976 based on games of the National Football League (NFL). It was abandoned after only one football season. (E-03.20.09)

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