Delaware Already Budgeting for Sportsbetting

March 20, 2009 (InfoPowa News) — Delaware governor Jack Markell may not yet have full political authority from the state legislature to introduce sports betting, but he's budgetting for it this year to improve the cash-strapped state's revenues.
 
The Street reports that the state budget features tough pay cuts for state employees as high as eight percent, together with increased medical plan contributions in an attempt to reduce state spending by some $330 million. Markell's proposals include reducing vacant positions, cutting back on the use of contractors and consultants, limiting a property tax rebate for elderly residents to those below a certain income level, and grounding state police aircraft.
 
Markell's proposed tax increases for the fiscal year starting July 1 total about $166 million. They include raising the state cigarette tax by 45 cents a pack, the alcohol tax by 50 percent, and the personal income tax rate for income over $60,000 by 1 percent. Increases in the corporate franchise, gross receipts and public utility taxes also are being proposed. The corporate franchise increase alone could raise more than $97 million next year, according to administration officials.
 
The governor's proposed sports betting lottery is projected to deliver some $55 million in its first year.
 
By virtue of a brief and unsuccessful experiment with a sports lottery in the late 1970s, Delaware is one of only four states, along with Nevada, Montana and Oregon, grandfathered under a 1992 federal law that bans sports gambling. Delaware's status as the only state east of the Mississippi River that can offer sports betting could provide an economic buffer against slot machine competition in neighboring Pennsylvania and Maryland.
 
In addition to allowing sports betting at the state's three existing slot machine casinos, Markell wants lawmakers to approve competition for those casinos by authorizing up to three new slot machine/sports betting casinos, as well as 10 sports-betting only venues. His proposal to increase the state share of slot machine revenue also is expected to generate opposition from the existing casinos.