HomePlay BallNew Day at Delaware Racino

New Day at Delaware Racino

Twin River Worldwide Holdings revives the fortunes of Delaware’s Dover Downs (l.) while continuing a program of expansion that hedges its bets in the company’s home Rhode Island market. With new gaming equipment and investment at the Delaware property, Twin River believes it can become a first-class facility.

For much of this decade, investing in any of Delaware’s three racinos would have been unthinkable. Before last year, the state’s three racetrack casinos—Dover Downs, Delaware Park and Harrington Raceway—struggled to turn a profit for years under the twin weights of state taxes and competition from Maryland and Pennsylvania.

Officials of Dover Downs Hotel and Casino, the state’s only publicly traded gaming property, were the most vocal about the difficulties of operating under Delaware’s onerous revenue taxes, which raked 43.5 percent of slot win and 29.4 percent of table-game win. Former Dover Downs officials suspended capital improvements and threatened mass layoffs because of the shrinking profit margin as Maryland Live!, MGM National Harbor and the nearby Philadelphia-area casinos siphoned off more and more of the property’s revenue.

Last year, the state passed a bill that reduced the tax burden on the casinos by some $16.8 million, cutting the state’s share of slot revenues to a sliding scale that was as low as 40.5 percent, and slashing the table-game revenue tax nearly in half, to 15.5 percent. The state also eliminated the annual table-game license fee.

For Rhode Island-based Twin River Worldwide Holdings, Inc. (TRWH), the timing couldn’t have been better. Already in expansion mode, the operator took note of the decreased cost of doing business in Delaware and, in particular, saw potential in Dover Downs.

TRWH, owner of the Twin River Casino Hotel in Lincoln, Rhode Island, had been hedging its bets against coming competition for years, as its own region became increasingly saturated with new properties in Massachusetts and elsewhere. In 2014, the company acquired the Hard Rock Hotel & Casino Biloxi from Leucadia International for $250 million. The following year, the operator bought out its local competition, buying the Newport Grand racino, which would close in 2018 with the license going to Twin River’s new Tiverton Casino Hotel near the Massachusetts border.

When Delaware relaxed its tax regime, the operator still was in an aggressive expansion mode. Last January, the company agreed to buy three casinos in Black Hawk, Colorado from Affinity Gaming. But with Dover Downs, the company saw both profit potential and one other opportunity—to take TRWH public, which it accomplished in March through a reverse merger with Dover Downs Gaming & Entertainment, the parent company of the Dover Downs Hotel & Casino.

According to Phil Juliano, senior vice president and chief marketing officer of Twin River Management Group, the lower cost of doing business was only one attraction leading to the merger.

“What put Dover on the radar was an opportunity to go public,” Juliano told GGB News. “The reverse merger left the shareholders of Dover with 7.75 percent of Twin River. It was a good deal for them and a good deal for us, because that’s the way we got to ring the bell on the New York Stock Exchange.”

But Twin River also saw huge opportunity in the facility itself. “They were capital-constrained, and we saw an opportunity—the facility has great bones,” Juliano said. “It’s become a destination property for gamblers from five states, and it also has the convenience factor for the locals in this region. With our ability to generate capital, we thought we could improve the operations.”

The lower tax was a bonus, he added. “We are prideful on our ability to operate in high-tax jurisdictions, as we have proven in New England with Twin River and Tiverton,” said Juliano. “We work there with a 72 percent tax on slots, so we consider ourselves somewhat expert in that aspect.”

Twin River closed on the Dover Downs merger at the end of March, and started making improvements immediately. Gaming, which provides around 95 percent of the property’s revenues, was first on the list. The operator began a refresh of the games on the slot floor first—a process that is still ongoing—in addition to a retooling of the marketing behind the games.

Juliano says improving the slot floor in Delaware is a refreshing change from the operator’s Rhode Island home base, where TRWH has been involved in a very public dispute with the Rhode Island, which governs the casinos, over the percentage of machines supplied by manufacturer IGT—some 84 percent of the floors at the two casinos.

Twin River officials have complained about the preponderance of games from the one supplier—which also supplies the system and tickets for the lottery—when state law provides that no manufacturer should supply more than 50 percent of the games on casino floors.

Juliano says the Delaware Lottery has been much more of a partner in its creation of a diverse slot floor. “We found the lottery to be fabulous here—great, great partners,” he said. “In New England, but it’s a tougher buy-in than it is here, and we’re competing with Encore, Plainridge operated by Penn National, MGM in Springfield, and the two Connecticut properties.”

The slot floor at Dover Downs is full of new games from several manufacturers, including Scientific Games, which also provides its casino management system including a marketing tool Juliano says is invaluable—the iVIEW Display Manager system and Elite Bonusing Suite (EBS), which opens up slot marketing through bonuses, tournaments and other player rewards right at the slot machine.

“This property was somewhat of a learning experience for us,” said Juliano. “We have 1,100 units here that have the latest version of iVIEW 4, which allows the EBS bonusing at the machines. At the same time we were looking at the situation here, we installed EBS on all 1,000 machines at Tiverton. So, we have EBS technology in Tiverton, and consequently we use it as a marketing tool and reward system.

“With this system, if you play more, you get more, so you’re tempted to keep playing.”

The retooling of the slot floor is accompanied by new games and a new marketing strategy for the table games. The company has added Asian games beginning with mini-baccarat, and is using time-tested marketing strategies to promote them.

“We’re making a move into the Asian market with our mini-baccarat, and we’re exploring binging in new hosts and junket reps,” noted Nick Polcino, vice president and general manager of Dover Downs Hotel and Casino, who adds that the table-game operation at Dover offers player-friendly marketing. “We have the best table-game limits in Delaware right now, and we’re advertising that,” Polcino said. “We offer 10X odds on craps, blackjack with a $5,000 maximum bet, mini-baccarat up to $10,000, and $5 blackjack during the week.”

The company also is adding an Interblock electronic table game stadium—another advantage, since Delaware taxes ETGs at the lower table game rate.

“Another thing we do is a marketing calendar for tables,” Juliano said. “We use a lot of different tools. We use gifts, we do tournaments. We’re adding to our entertainment. We have some synergistic opportunity there, because I’m buying entertainment for three properties, so therefore, I can route an entertainer through all three properties. We have 2,000 seats here in the event center. So, that’s an opportunity that will help table games.”


Hotel, F&B, Meetings

TRWH also immediately turned its attention to improving the 232-room Dover Downs Hotel and Conference Center, a high-end facility including an indoor pool, sauna, fitness center and ballroom which opened in 2002 and is still the only hotel among Delaware’s three casino properties.

The operator has renovated every room, and has added food and beverage facilities to augment the original Michelle’s gourmet restaurant.

“We’re focusing on the holistic property experience,” said Polcino. “There are a lot of different outlets and venues, so we’re trying to introduce some new influences in several areas. That’s why we’re bringing in Jerry Longo’s Meatballs and Martinis, which we think can be a marketing driver for our customers—introducing Italian cuisine that’s scrutinized even in western Rhode Island, where you can get great Italian food everywhere you go. We think that will be a really positive addition to the property here, and we can cross-utilize that for marketing events.”

Jerry Longo is South Philly-raised, an Atlantic City guy, a celebrity-focused guy,” added Juliano. “He actually appeared on the last episode of The Sopranos. He’s a famous table-games guy who ended up in New England, and knows everybody in New England that plays the tables.

“That’s one goal of our marketing—to bring in a destination restaurant that rings loud and clear to the table-game customers. And this individual has this cachet and allure to attract table-game players.”

Among other improvements will be a renewal and rebranding of the property’s lobby bar. “Previously, when you walked into that lobby, the lobby bar always was closed,” Juliano said. “We’ve turned it into a restaurant, and it will eventually be open seven nights a week. It will come out into the lobby a bit, and have that feel like the Coliseum Shops restaurants. That will bring life to the lobby all the time.

“We believe if you can prove your efforts are incremental, you go for it. You don’t chase a false margin that has been achieved by cutting costs in some other area to get to a margin that everyone loves. Because you can’t put margin in the bank. You can only put money in the bank. That was taught to me by Jack Binion, and it makes all the sense in the world. So, if we think we can take an action that will drive an incremental dollar, we take it.”

Marketing for Dover Downs employs a broad brush—not only for casino and hospitality customers, but the property’s popular horse and motor sports tracks, for which many hotel guests have a killer view out their hotel-room windows. The property runs harness races 80 nights a year and, through a separate company, three major motor sports events, including two big NASCAR races.

According to Juliano, the property employs a two-pronged marketing strategy. “We define an inner market and an outer market,” he said. “The style of marketing we do is called precision marketing. It’s behavioral based. We understand behavior; we understand visitation patterns. It’s our secret sauce. We take the same approach in all of our properties.

“What’s the No. 1 thing an outer-market customer needs? A place to sleep. So, we have that, whereas our two competitors right and left of us don’t have it. We have slot and table customers all week, but on the weekends, our best customers show up. And then at the same time, we’re not going to neglect our local customers on the weekend. There has to be a promotion, a program or event to attract those people.”

For Twin River Worldwide Holdings overall, the expansion mode continues. In July, the company agreed to acquire the Isle of Capri Kansas City and Lady Luck Casino Vicksburg from Eldorado Resorts.

“It’s definitely an exciting time to be with Twin River Worldwide holdings,” said Paul Juliano, vice president of corporate hotel operations for TRWH. “We are aggressive with our capital development in all our properties, so in everything we do, we look for a demonstrative return on our investment. But specifically here at Dover Downs, we’ve got about eight capital projects in the pipeline right now that will happen between this year and the end of next year.

“We are always looking for a measurable return on investment, always understanding who our core customer is, and how to cater to them.”

“Our management team has done a great job diversifying our revenue base and creating sustainable growth,” said Phil Juliano. “The Dover Downs acquisition and New York Stock Exchange listing mark the beginning of a new chapter for us by adding to our geographic base, providing us currency for strategic steps, and eventually leading to liquidity for stockholders.”

More Delays on Orego
N.H. Sportsbook Gold
Rate This Article:

    Join the fun!

    Sign-up to receive the latest online gaming
    promotions, news and information!

    Honest Casino