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Dover Downs has 'Underground' connection (March 10, 2009 7:05 AM)
by Ray Poirier | Despite poor market conditions on Friday, shares of Dover Downs Gaming & Entertainment Inc. (DDE) came to life following the announcement that the Atlanta, Georgia, City Council had approved video lottery machines, known as VLTs, for the Underground Atlanta mall.
After opening at a meager $2.63 per share, DDE shares surged upward throughout the day before closing at $3.35, an increase of almost 28%.
Earlier this year, Dover Downs Gaming announced it had reached an agreement with the operators of the city-owned mall in Atlanta to operate a VLT facility, similar to the one it installed at its Delaware racetrack several years ago. Two things were needed: approval of the City Council and further approval from the Georgia Lottery Board.
With the strong endorsement from Mayor Shirley Franklin, the proposal was approved by the council on a 10-0 vote.
Commenting on the vote, Councilman H. Lamar Willis said, "I think we’re in a unique position to see this work out. Obviously, the Baptists who hold conventions in Atlanta may not come back, but hopefully many of the conventions that go to Las Vegas, or other places for the entertainment may come here for that."
So far, there has not been any word from the Lottery Board, whose approval is essential to the VLT installations.
Under Georgia law, VLTs can be approved without a vote in the state legislature.
Dan O’Leary, one of the partners in the firm that manages Underground Atlanta, told council members that initial annual revenues from the slots facility could reach close to $350 million. Half the proceeds would go toward the city’s scholarship program.