Del. panel OKs $8M casino bailout

Delaware legislative committee approves casino bailout as part of capital spending plan

Associated Press

DOVER, Del. (AP) -- A legislative committee agreed Thursday to give $8 million to Delaware's casinos as it wrapped up work on a capital budget for the coming fiscal year.

The committee voted unanimously on a proposed $477.8 million capital budget, which is $54 million higher than the $423.5 million plan proposed by Gov. Jack Markell in January.

Using some $50 million in newly available funds, the committee approved Markell's recommendation to extend an $8 million financial bailout for Delaware's three casinos to help cover anticipated increases in slot machine vendor costs.

The capital budget, which the House and Senate will vote on next week, includes about $190 million for transportation projects and more than $103 million for school construction and renovations.

The plan also includes $8 million in new funding apiece for the port of Wilmington and for open space and farmland preservation. Committee members also doubled the allocation for repairing high-hazard dikes and dams to $5 million and reallocated $902,000 for a proposed sports complex in Kent County.

The panel also added more than $4 million to the $7.4 million that Markell initially proposed for minor capital improvements and equipment for public schools.

The casino relief plan generated considerable debate among committee members, with some denying that it amounts to a taxpayer-funded bailout.

"There's a lot of rumor around this building that we're somehow trying to bail out the casinos," said Sen. Colin Bonini, R-Dover. "This is in direct proportion to increased costs."

Administration officials say the $8 million will be used to cover anticipated cost increases when slot machine vendors renegotiate contracts that expire in coming weeks. Currently, vendors get about 5 percent of net proceeds per machine after payouts to players. Administration officials say bids for new contracts are significantly higher, with one vendor wanting 12 percent. Officials attribute the higher contract proposals to higher demand for machines because of new casinos in Maryland and Pennsylvania.

But Rep. Dennis Williams said the three casinos don't deserve a bailout.

"It's my feeling that the casinos are in their current financial situation because of mismanagement," said Williams, who has introduced a bill calling for more casinos in Delaware.

Committee co-chair Robert Venables, D-Laurel, countered that the existing casinos contribute a significant of money to the general fund, including $200 million from slot machines alone in fiscal 2012, and are facing significant financial challenges.

"We almost have to do the $8 million to let them hold on a while," he said.

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