An amendment HB 194 requiring new casinos to donate profits to charity gets a cold reception from sponsor of original bill.
A group of would-be Sussex County casino developers have teamed up with a state representative on legislation that would require any new Delaware gambling venue to donate at least 51% of its profits to charity.
The amendment to House Bill 194, which would permit the construction of additional casinos in the state, was filed April 15 by Rep. Greg Lavelle, R-Sharpley, and written by backers of the proposed Georgetown Downs racetrack and casino.
Dover attorney Glenn Mandalas, a principle investor in Georgetown Downs, said the amendment is an effort to raise the profile of the project and distinguish it from other Sussex casino proposals.
“Quite honestly there are a number of proposals and there probably is only going to be one additional casino in Sussex County, so how do you distinguish yourself from the pack?” he said. “We as a group feel that our proposal not only will help the state from a budgetary perspective, if we have an opportunity to help our communities as well, why not do that?”
Mandalas said the charity money would come from the casino’s net profits — after state taxes, overhead costs and operating expenses have been paid.
He also said the investors don’t have any particular charities in mind, but if the casino gets off the ground the management would set up a panel to distribute the money to worthy causes.
As proposed, Georgetown Downs would be a renovation of an abandoned harness racing track on Route 9, with casino gambling and other amenities.
When the project was first unveiled last fall, it’s backers included Dover attorney and developer Constantine Malmberg, former Sussex County Administrator Joe Conway, gambling report publisher Frank Fantini and Philadelphia developer Michael Pouls, as well as Mandalas and his partner in the law firm Baird Mandalas, Kevin Baird.
However, Mandalas said some of the investors have considered withdrawing their support, although he wouldn’t say who.
Lavelle, who does not support HB 194 in its current form, agreed to sponsor the amendment for the sake of argument.
“I put it in to raise that discussion. I think it’s a novel approach,” he said.
Rival developer Preston Schell, whose proposed Del Point casino resort project in Millsboro has figured heavily in the ongoing debate over additional venues, said charitable giving shouldn’t be legislated.
“I don’t think that other people should dictate through legislation to other parties what they should do with their money in terms of charitable contributions,” he said.
Schell also questioned the legitimacy of the Georgetown group’s commitment to pony up half of their profits.
“Profit is a very loose and easily manipulated term,” he said.
House Majority Leader Rep. Pete Schwartzkopf, D-Rehoboth, is a strong supporter of Del Pointe and the prime sponsor of HB 194.
The amendment, Schwartzkopf argued, would stifle competition for a limited number of new casino sites, since investors and financial backers would likely have a hard time accepting reduced profits.
“I think it would narrow the field. The financing would be much more difficult,” he said.
He also thinks the amendment will hinder an already beleaguered effort to pass the bill.
“It’s very difficult to look at that and vote against it,” he said. “I imagine when the nonprofits see it they’re going to be all over us.”
Currently, Schwartzkopf said he lacks the 21 votes needed to pass the bill in the House and until he has enough support, he won’t bring the legislation to the floor.
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