Delaware Lawmakers Propose Competitive Online Sports Betting Market

It's not a surprising turn in Delaware, where a report late last year from a working group said the state “needs to have multiple online sports lottery operators (skins).”

Apr 15, 2024 • 17:42 ET • 2 min read
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The First State is also a one-sportsbook state. However, a handful of Delaware lawmakers are now backing an effort to create a competitive market for online sports betting, which would end the legal monopoly granted to BetRivers.

House Bill 365 was introduced last Thursday in the Delaware General Assembly, with a synopsis of the bill saying it provides "the framework and requirements for a competitive mobile sports wagering market in Delaware" under the supervision of the state lottery director.

The bill would allow the director to license online sportsbook operators that have partnered with the state's three casinos. Those casinos could partner with up to two online sports betting operators apiece, meaning there could be six additional mobile wagering providers in the state.

A sixfold increase

Delaware’s new sports betting market would have to launch within five months of the bill's passing, but if it does pass, it would allow for six times as many legal online sportsbooks as there currently are in the state. 

Delaware sports betting has existed for years at the state’s three brick-and-mortar casinos, such as Bally's in Dover, and through a football parlay game at authorized lottery retailers. Delaware then officially added an online sports betting channel in late 2023 and early 2024, after Rush Street Interactive-owned BetRivers won the rights to provide online gaming for the Delaware Lottery for at least five years.

That, however, is it in terms of legal mobile wagering in the state.

H.B. 365 proposes to change that fact, by charging online sportsbook operators a $500,000 fee for a five-year license, in addition to 18% of their adjusted revenue. That adjusted revenue would be total wagers minus winnings paid to customers, excise tax payments to the federal government, and free bets and other promotional credits provided to users, albeit only equal to up to 2.5% of handle until July 1, 2025, and then up to 2% after that point. Furthermore, operators would have to chip in 1.5% of their monthly revenue for horse-racing purses.

Because it creates a new fee, the legislation would require three-fifths of all Delaware lawmakers to support the measure. Nevertheless, licensing fees would flow to the state's general revenue fund while the tax money raised would cover the lottery's oversight costs. Up to 3.5% of all proceeds would be earmarked for problem gambling programs, and the rest would go to the state's general fund. 

Homework already done

It's not a surprise to see such legislation pop up in Delaware. The primary sponsor of H.B. 365 is Democratic Rep. Franklin Cooke, who was also a member and architect of the state's “Internet Sports Lottery Legislative Working Group." 

Last December, the working group released a report that said the state “needs to have an online sport lottery” and that it “needs to have multiple online sports lottery operators (skins).”

H.B. 365 suggests the new online sports betting market could help the state curtail wagering with offshore sites and provide additional revenue. 

The preamble notes that "Internet-connected mobile and digital platforms are now the predominate means by which legal sports wagers are placed in the United States, with more than 80% of legal sports wagering activity occurring through computers, smartphones, or other Internet-connected devices.” 

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