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Panel studying Del. gambling industry meets

Randall Chase, Associated Press

DOVER, Del. (AP) -- A reconfiguration of the revenue sharing plan for Delaware's gambling industry could be among the recommendations made by a commission examining how to address competition from neighboring states.

Lawmakers established the lottery and gaming commission earlier this year to examine the competitive marketplace facing Delaware's gambling industry. The panel, which met Wednesday, faces a Jan. 31 deadline for reporting findings and recommendations to the governor and the General Assembly.

State Finance Secretary Tom Cook, the chair of the commission, said he expects members will discuss a wide range of ideas before finalizing their recommendations.

"I think we're at a crossroads with regards to this industry and where we go from here," said Cook.

Delaware officials have seen the state's casinos steadily lose business in recent years to neighboring states despite the addition of table games, sports betting and online gambling. State officials earlier this year also extended an $8 million financial bailout for Delaware's three casinos to help cover anticipated increases in slot machine vendor costs.

"I'm out of tools rights now," Cook said.

Among the possible recommendations are reconfiguring the current revenue-sharing scheme among the state, the casinos, and the horse racing industry.

"We'd accept anything at this point," Denis McGlynn, president and CEO of Dover Downs Gaming & Entertainment Inc., said after Wednesday's meeting.

McGlynn declined to say what specific recommendations he hopes the commission will make. But he said casinos want to be treated fairly and as a legitimate industry — not as a "sin-tax pot of gold" for the state's general fund.

While tax relief for the casinos could be difficult in what state budget officials have indicated will be a tight fiscal year, McGlynn said he'd welcome gradual steps to help improve the casinos' financial stability.

"All we can point out is the state of our industry needs help, and we'll take it in any and every form they can conjure, even if it's a matter of incremental relief over three years rather than trying to fix it all at one time."

Representatives of the harness racing and thoroughbred racing industry are hoping lawmakers will protect their share of gambling revenue after seeing their percentages cut a few years ago to help balance the budget.

The state currently takes 43.5 percent of the top of net gambling proceeds. The horsemen get roughly 10 percent before casino vendor expenses are paid, and the casinos get the remainder.

One option being considered is taking vendor fees off the top before the state gets its share, which would increase the amount of money going to casinos, at the expense of the state and horsemen. Other options being explored are revising the formula for sharing table game and online gambling proceeds, and a tiered tax structure for casinos based on the amount of net gambling revenue, which does not include winnings paid to players.