Dover downer; Connecticut rewrites the rules

Expect another request for tax cuts from Dover Downs after the Delaware racino posted a 96% decrease in second-quarter profits. (Slots are taxed at a usurious 43%.) While Dover Downs made $32,000, it suffered a 7% decline in casino revenues. A piquant Delaware law requires racinos to close on Christmas and Easter, and the latter happened to fall in 2Q17. CEO Denis McGlynn also has been pressing Gov. John Carney for increased promotional efforts on the casino industry’s behalf — although, having extracted that 43% pound of flesh, it’s an open question whether Carney would reinvest it right back from whence it came.

“The balance of our performance reflects the expected impacts of our increasingly competitive market,” said McGlynn and he’s not exaggerating. Spectrum Gaming Group estimates there will be 65 casinos operating in the Northeast by 4Q17, a number that would have seemed inconceivable 20 years ago.

* Progress on Cordish Gaming and Greenwood Racing‘s casino project in Philadelphia is hopelessly stalled, in part because courts and regulators alike are trying to sort out its ownership structure. Investor Watche “Bob” Manoukian has multiple fingers in the Live! Philadelphia Casino & Hotel pie, having put $34 million worth of investment into a trust for his kids. Now Pennsylvania gaming regulators have to decide whether this move violated the Keystone State’s “one and one-third” ownership restriction on casinos, a law designed to prevent any one company from dominating the market. (If you’re pro-free market that ought to give you some qualms, even if it has worked out fairly well to date.)

Manoukian already owns 86% of Parx Casino, so the Pennsylvania Gaming Control Board will have to split some mighty fine hairs, particularly in deciding whether having money in trust redounds in any way to Manoukian’s interest. The Greenwood/Cordish partnership wouldn’t have been our first choice for another Philadelphia casino — assuming even that the City of Brotherly Love can support another one — but awarding this license to the market’s dominant operator (Parx) was a regrettable case of them that has gets.

* Working somewhat backward, having already authorized an East Windsor satellite casino for Mohegan Sun and Foxwoods Resort Casino, the Connecticut Legislature is amending their gaming compacts to reflect the new reality, as well as to close a loophole that the two tribes could have used to escape their 25%-of-slot-revenue obligation to the state. The amendments passed overwhelmingly in both houses of the Lege. (The Bureau of Indian Affairs has yet to weigh in officially.) MGM Resorts International, meanwhile, is going to position its litigation against the new casino on the grounds that it is not on land the feds have placed into trust. I’m no legal expert but it’s an argument that sounds like it would hold water. And to think that Foxwoods and MGM used to BFFs. Tut, tut, how sad.

As for Mohegan Sun, it’s inducting Kenny Chesney into its “Walk of Fame.” Too bad the announcement wasn’t accompanied by an explanation of that mysterious Renée Zellweger divorce.

* The Sault Ste. Marie Tribe of Chippewa Indians is butting heads with the Trump administration over the denial of Michigan land-into-trust applications for casinos in Lansing (below) and Romulus. The first denial is a particularly severe blow, both due to its location in downtown Lansing and because it seemed like a fait accompli. The tribe seemed to be laying the groundwork for a lawsuit, as President Aaron Payment said, “We are deeply disappointed in the U.S. [Department of the Interior]’s decision to deny our mandatory trust land petitions for Lansing and Romulus, largely because it is based on a flawed legal analysis and because our Land Claims Settlement Act approved by the Congress of the United States in 1997 clearly requires that the applications be approved.”

* The latest threat to Atlantic City: keno-style lottery games. Already Assemblyman Vincent Mazzeo (D, right) is riding to the Boardwalk’s defense.

* Although Caesars Entertainment pulled back from GameCo skill-based slots in Atlantic City, don’t think for a minute that it has given up on SBS machines in principle. It has just installed four Pharoah’s Secret Temple games at Harrah’s Cherokee Resort in North Carolina. The game is described as one “in which players embark on an adventure to unlock the riches of the Pharaoh’s secret temple by matching gems to collect rare treasures before their time runs out … Pharaoh’s Secret Temple features awesome boosts, power-up prizes, charms, and Egyptian-themed traps.” GameCo, meanwhile, is establishing footholds in Aruba and St. Maarten, and looking to the big European and Asian markets, in search of new conquests.