The two organizations involved in online sports betting in Delaware are against recent legislation that would expand the market to up to six sportsbooks.
Both the Delaware Lottery and Rush Street Interactive (RSI), the parent company of sole online DE sports betting operator BetRivers, are against HB 365.
Multiple sponsors of the bill did not reply to LSR requests for comment, though Reps. Frank Cooke and William Bush released a joint statement following the bill’s introduction:
“It’s important that Delaware remains competitive and responsive to the preferences of its residents,” Bush said. “By providing Delawareans with a larger mobile sports wagering market, similar to those thriving in neighboring states, we can level the playing field and bring in a new source of revenue for our state.”
More operators ‘would not grow the pie’
Adding more operators would lead to smaller slices of the pie for everyone, said Helene Keeley, the executive director of the Delaware Lottery, told LSR.
“The Delaware Lottery’s job is to maximize State revenues,” Keeley said. “HB 365 would reduce State revenues, negatively impact the State’s equine and agricultural industries, and exacerbate problem gambling by significantly increasing ‘free’ bets and promotions. If enacted, the bill would shift State revenues to sports wagering companies and also trigger federal excise taxes.
“The Delaware Lottery’s new mobile sports and iGaming application – offered by the State’s three casinos via the BetRivers app – was awarded through an open, public competitive bid process. It’s performing extraordinarily well. In March, overall sports lottery handle and mobile casino lottery net gaming revenue increased 440% and 225% respectively versus the prior year.
“HB 365’s proposal to license multiple mobile sports gaming businesses to compete with ourselves would not ‘grow the pie’ but instead lead to smaller slices of pie – especially for state taxpayers.”
RSI calls out other sports betting operators
In a statement to LSR, Rush Street said other sports betting companies are “seeking to do an end run around the Delaware Lottery” with this bill.
“After a thorough State procurement process, including a formal RFP that only concluded less than a year ago, RSI was selected by the Delaware Lottery to operate both iGaming and mobile sports betting for the State,” a Rush Street spokeperson said. “In reliance on the Lottery’s contract award, RSI invested substantial amounts of time and money to produce an outstanding product for the Lottery and Delawareans.
“The early results from RSI’s operation have been tremendous, with the State of Delaware’s online gross gaming revenue in March alone being 300% greater than the previous all-time high during the 10-year history of iGaming in Delaware.
“Now, having either participated in the RFP process and lost, or having chosen to not enter a well-publicized procurement process, a group of sports betting companies with no connection to or investment in Delaware are seeking to do an end run around the Delaware Lottery with a bill that would significantly reduce revenue to the State (resulting in less money available to fund key State programs) and to Delaware’s horsemen and women and tracks and the jobs they support, and upend the longstanding Lottery-based gaming model in Delaware, which requires that gambling be controlled by the Lottery.”
How did Delaware sports betting get here?
A disjointed effort between the Delaware Lottery and the legislature led to these crossroads.
Cooke filed in late January 2023 to authorize a legislative study group on Delaware sports betting. That was two weeks after the Delaware Lottery formally launched its RFP for a new online gaming partner.
The Lottery then picked Rush Street as the winner of the monopoly for a five-year period while the legislature continued to study whether a competitive model would be better for the state. By the time the state said a competitive model was ultimately the best decision, BetRivers was less than a month away from taking the state’s first online wagers.
The sponsors then introduced the bill earlier in April.
Sports betting, iGaming revenue comparison
The key period to observe is the first three months under Rush Street compared to the same period last year when 888 ran iGaming and there was no online sports betting.
Delawareans bet nearly $50 million on sports over the first three months of 2024 with $5.6 million in revenue, of which the state received $1.9 million. That is compared to $16.1 million in handle and $3.3 million in revenue, of which the state received $1.7 million.
One significant difference between the two periods is vendor fees: the Lottery paid $2 million in vendor fees for those three months this year compared to $641,000 last year.
