Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended March 31, 2011.
The Company’s revenues for the first quarter of 2011 were $59,406,000 compared with $56,050,000 for the first quarter of 2010. Gaming revenues increased 5.1% compared to the first quarter of last year. The addition of table games revenue for the quarter was partially offset by lower slot win.
Gaming profits were lower compared to the first quarter of last year as a result of the lower slot win, high gaming taxes, license fees and costs associated with table game operations, and from higher marketing costs during the quarter.
Other operating revenues increased 16.5% from higher cash hotel, food and beverage revenues. Occupancy levels in the Dover Downs Hotel were approximately 85% for the first quarter of 2011 compared with approximately 73% for the first quarter of 2010.Interest expense increased $128,000 during the quarter from slightly higher interest rates offsetting lower outstanding borrowings. The effective income tax rate for the quarter was 111.8% compared to 47.6% in the first quarter last year. The increase for this interim period relates to the impact of a permanent book vs. tax difference being magnified by the low pretax earnings. The Company expects the effective income tax rate to approximate 40% for the year. Net loss was $38,000, or $.00 per diluted share, compared with net earnings of $1,673,000, or $.05 per diluted share for the first quarter of 2010. Denis McGlynn, the Company's President and Chief Executive Officer, stated: "While we were able to grow revenues in an environment with many economic and competitive challenges, the tax burdens at these business levels remain significant. We are confident that we have the facility, amenities and service standards to compete, but as so much of our revenues come from out of state patrons, we cannot ignore that our customers suddenly find that they have a multitude of other gaming choices closer to home. A more reasonable gaming tax is needed for us to be able to continue to reinvest in our facilities and to offer compelling amenities and games offerings that will allow us to remain the preferred gaming choice for these patrons. Long-term, structural changes are needed to benefit all stakeholders in Delaware’s gaming industry, including the State."
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