Dover Downs Gaming & Entertainment: Off to the races

If the names Richard Petty, Dale Earnhardt and Jeff Gordon ring a bell, then so should the name Dover Downs, the site of Dover International Raceway (or the “Monster Mile”) a long-time fixture on the NASCAR circuit. To race fans, Dover is synonymous with racing. 

But Dover is more than a racing – much more. In fact, two companies stand where there was once one: Dover Motorsports (NYSE: DVD) and Dover Downs Gaming & Entertainment (NYSE: DDE). For investing fans, the latter holds the greater intrigue. 

Dover Downs Gaming ($247 million in annual revenue) consists of Dover Downs Slots – a 97,000 square-foot video lottery (slots) casino complex; the Dover Downs Hotel – an admixture of luxury accommodations,  conference hall, banquet, fine dining, ballrooms and concert hall facilities; and Dover Downs Raceway – a harness racing track with parimutuel wagering on live and simulcast horse races.  

An appropriate description of Dover Downs is that it's not too hot (Las Vegas) and it's not too cold (Deadwood, South Dakota).  It splits the market, though tacking more toward a luxurious Vegas flare. Most of its customers are drawn from the densely populated Mid-Atlantic states.  Philadelphia, Baltimore and Washington, D.C. are all located within a two-hour drive. 

Besides benefiting from a favorable geographic, Dover Downs also benefits from favorable legislative diktats. Only three existing horse racing facilities in Delaware are permitted a gaming license, while slot-machine operations are verboten in Maryland, Virginia and Washington, D.C.

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