Will sport-betting be coming to the First State? That’s a question members of the Markell administration will be working to answer over the next six weeks.
“There has been no decision made,” Delaware Sec. of Finance Gary M. Pfeiffer recently told the House of Representatives’ Gaming & Pari-Mutuels Committee on Jan. 28, 2009. “The governor has said he’s prepared to evaluate it and we’re prepared to analyze it and make a recommendation to him that’s consistent with the values of the State of Delaware [and] that’s in (our) best economic interests.”
The House and Senate are in recess for the next six weeks while the Joint Finance Committee conducts budget hearings. During that time, Sec. Pfeiffer said his agency will be exploring the issue and providing information to Gov. Markell on which he’ll base his decision.
Deputy Sec. of Finance Tom Cook told the committee that should the governor choose to proceed, “the goal would be to come back with legislation when (the General Assembly) reconvenes in the March 17th to April 9th time frame. … If we were able to get that passed during that time, we feel that we could reach the goal of being up and running by the fall football season.” Cook noted that football is the most lucrative sport for generating sports-gaming revenue.
Like the governor, State House Minority Whip Dan Short (R-Seaford), who sits on the House Gaming & Pari-Mutuels Committee, says he’s undecided on the issue. “I want to see the Attorney General’s position on this, I want to know the type of games we’re going to be running, and I want to know how it would be implemented.”
Rep. Short added that if a sports-betting bill is introduced, its fate may not rest on the moral questions it raises but on the size of the state’s budget shortfall. Delaware needs to address a $60 million dollar deficit in the current fiscal year and a projected $600 million of red ink in the upcoming budget which begins July 1st.
“I believe the magnitude of the budget deficit facing our state is going to heavily color how many lawmakers are ultimately going to vote on this,” Rep. Short said. “As the public begins to understand the enormity of the problem, and the impact it could have on services, I think it’ll also influence how many citizens view it.”
A 2008 report by Morowitz Gaming Advisors – commissioned by Delaware’s three race tracks/slot machine venues – estimated the state could earn as much as $69.7 million dollars in the first full year of legalized sports gaming. Nearly $26 million of that total would be generated from sports-betting, with the remainder coming from increased slot machine play and horse racing action produced by the greater amount of traffic drawn to the tracks.
A separate state report released earlier in 2008 estimated the state could reap up to $30.6 million if sports-betting were implemented. About 90-percent of the expected money would come from improved slots revenues.
While Delaware competes for slot machine patrons with New Jersey and Pennsylvania, and will likely face competition from Maryland next spring, it would be alone in offering legalized sports gaming. When Congress enacted the Professional and Amateur Sports Protection Act in 1992, states that did not already have legalized forms of sports gaming (or were in the process of implementing it) were barred from the practice. Only Nevada, Montana, Oregon and Delaware were exempted. Delaware’s exemption was based on a sports gaming card game the state operated in the late 1970s.
However, sports-betting in Delaware would be limited. Unlike Las Vegas, where patrons can bet on a single game, Delaware would only be allowed to operate games requiring combination or parlay bets, similar to the now defunct card game. According to the Morowitz report, the odds of winning would be longer since the player would have to win both portions of the combined bet to be paid. However, the payoff would be higher than it would be for a simple head-to-head bet.
Since slot machines (video lottery terminals) were legalized in Delaware in the mid-1990’s, they have become an important source of state revenue. According to Tom Cook, traditional lotteries, like Powerball, pull in about $30 million annually. Slot machines generate about seven times that amount. In total, slots/lottery games account for about $250 million that flow the state coffers each year.
New Ag Secretary Sees Challenges Ahead
Agriculture Secretary Ed Kee says he sees numerous challenges for farmers in the First State.
Sec. Kee recently told the House Agriculture Committee that maintaining Delaware’s agriculture infrastructure, as well as on-going nutrient management efforts, are among the top issues facing farms.
Convincing the children of farm families to stay in agriculture also warrants serious attention, Sec. Kee said.
State Rep. Dave Wilson (R-Cedar Creek Hundred), who tills about 175 acres in Sussex County to support his Haflinger horse operation, agreed. “Maintaining the continuity of family farms in Delaware will help prevent farmland from turning into housing developments. If kids are convinced there is no future in agriculture, agriculture won’t have a future. Keeping family farms viable is good for agriculture, good for the economy, and good for our state.”
Sec. Kee said one of the ways to help farmers is to keep regulations at a minimum. He said farmers that he has worked with closely in neighboring Maryland have told him that regulatory paperwork costs them an estimated $20 to $40 an acre. “We’re talking about famers who work between two and three thousand acres and that [cost] doesn’t come out of anything but their bottom line, so we have to be vigilant on that.”
State Rep. V. George Carey, a working farmer and a member of the House Ag Committee, said Sec. Kee was preaching to the choir.
“I’ll give you a good example of how wacky regulations have become,” Rep. Carey said. “I got a call in late January that chicken growers, like myself, who were growing more than 125,000 broilers, had to sign a statement that our operations were a source of ammonia. These statements had to be signed and returned that day, and no one – not my neighbors, not DNREC, not the company I grow for – could tell us why. Everyone was just dumbfounded.”
Rep. Carey said he later learned the new rule came from the U.S. Environmental Protection Agency.
“This is the kind of thing that gives a farmer pause. Am I going to have someone from the EPA show up on my farm two months from now and demand that I put ammonia scrubbers on my chicken houses? Farming is filled with enough uncertainty. We don’t need government adding to the mix.”
He said he recognizes that farmers have a duty to be environmentally responsible and that most are already well-motivated to do so.
“Farmers typically live where they work, so they have a pretty good incentive to make sure the air they’re breathing and the water they’re drinking are clean and healthy. If the people running companies had to live at their manufacturing plants, we’d have a lot less pollution in this country.”
Sec. Kee said he wants to partner with new Delaware Economic Development Office Director Alan Levin to reach out to farms and address their business concerns.
“I think the next 10 years are going to be critical for Delaware agriculture,” Sec. Kee said. “I’m interested in keeping farmers profitable, because that will do as much for farmland preservation as anything else.”
Bipartisan Group Reaching Out to Small Businesses
In what is believed to be the first organization of its kind, state legislators interested in helping small businesses survive the current recession gathered for their initial meeting at Legislative Hall recently.
State Rep. Dan Short (R-Seaford) and State Rep. Bryon Short (D-Highland Woods), both of whom are small businessmen, formed the informal group to bring together lawmakers with a common concern about the welfare of Delaware’s business community.
“The majority of jobs in our state are the result of small businesses," said Rep. Dan Short. "Now more than ever, we need to help these businesses maintain the jobs they have and set the stage for future growth.”
Rep. Dan Short said membership in the group still needs to be formalized. “We want folks in this group that have legitimate small business experience and share a common vision for crafting and sponsoring legislation that will positively impact businesses in this state.”
Although Rep. Dan Short said members of the Senate had expressed an interest in taking part in the forum, none were present for the first meeting. However, businessmen were well-represented among the more than one dozen state representatives that were in attendance. The bipartisan group included State Reps. Gerald Hocker (R-Ocean View), Dave Wilson (R-Cedar Creek Hundred), E. Bradford Bennett (D-Dover South), S. Quinton Johnson (D-Middletown), and Robert E. Walls (D-Milford).
With such a politically diverse group, Rep. Dan Short said there is the potential for partisan conflict when the positions of the Small Business Caucus are in opposition to the stance of the House Majority and Minority caucuses.
“We all realize that the members of this group could find ourselves at odds with our colleagues on some issues, but I also think there is a great opportunity for success,” Rep. Short said. “To the best of my knowledge, this type of organization has never been attempted before in the legislature. We have a lot of business experience on which to draw and I truly believe we have a chance to do something significant to help our state recover from this recession. That’s worth taking a chance and ruffling a few feathers.”
Also attending the first meeting was the new head of Delaware Economic Development Office, Alan Levin. As he takes over the reins at DEDO, he told the legislators he’ll be thinking small. “We’re going to place an emphasis on where the rubber meets the road and that’s small and medium size businesses.”
As the former CEO of the Happy Harry’s drug store chain, Levin said he knows what it is like to be handcuffed by regulations – something he said the incoming Markell administration wants to avoid, at both the state and local levels.
“The governor intends to use his office as a bully pulpit to tell the counties and municipalities that ‘enough is enough.’ We want people to do business in Delaware. Government should not be an impediment to doing business.”
That was welcome news to Rep. Hocker, who started his business career in Sussex County by working in his family's hardware store as a boy.
"For years, small business people in this state have been increasingly burdened by government regulations and the resulting higher costs they've imposed,” Rep. Hocker said. “With the economy slowing and revenues falling, small businesses are facing huge challenges on multiple fronts. The General Assembly needs to listen to their concerns and take action. Our economy largely rests on the health of the small business community."
Rep. Hocker added that repealing the state's prevailing wage law, and holding the line on minimum wage, are two of things that legislature can do to help save existing small business jobs and create new ones.
Action on Bills
House Bill 57 – (Sponsors: Rep. Booth and Sen. Simpson) – This bill would create special license plates for Sussex, Kent and New Castle County paramedics.
Status: Pending action in the House Public Safety & Homeland Security Committee.
House Bill 58 – (Sponsors: Rep. Oberle, et. al.) – This bill would make speeding in excess of 95 miles per hour a class A misdemeanor and would revoke the violator’s driver license.
Status: Pending action in the House Public Safety & Homeland Security Committee.
House Bill 62 – (Sponsors: Rep. Oberle, et. al.) – This bill seeks to create the crime of brandishing a deadly weapon against a law enforcement officer, firefighter, paramedic or emergency medical technician. The crime would be a class B felony.
Status: Pending action in the House Judiciary Committee.
House Bill 27 – (Sponsor: Rep. Kowalko) – This bill seeks to restrict former legislators from lobbying for a period of one year after their term of office ends. Those violating the measure would be guilty of an unclassified misdemeanor. The measure is similar to legislation sponsored by State Rep. Deborah Hudson (R-Fairthorne) in the last General Assembly. Broader in scope, that bill (House Bill 196) also proposed placing lobbying restrictions on state agencies heads, cabinet officials, the governor’s executive staff and all statewide elected officials. HB 196 passed the House unanimously, but died in the Senate without action.
Status: Slated to be worked in the House on March 24th.
House Bill 1 – (Sponsors: Rep. Gilligan, et. al.) – When the state’s Freedom of Information Act was passed, the Delaware General Assembly was specifically excluded from its provisions. HB 1 seeks to make all records and meetings of the state House and Senate subject to the FOIA, except for caucus meetings. Similar legislation was passed in the State House during the last General Assembly, but was bottled up in committee in the Senate.
Status: Slated to be worked in the House on March 19th.