A Delaware legislative working group issued a report this month, supporting the need for competitive online sportsbooks.
Delaware was the first state to legalize retail sports betting after the US Supreme Court lifted the ban in 2018. Delaware Governor John Carney placed the first bet on the Phillies. It was a winning bet, as the Phillies beat the Cubs. And sports betting has been a successful enterprise for Delaware, bringing in $62.6 million in tax revenue. But the state could have been an even bigger winner.
Delaware never passed legislation legalizing online sports betting, which was a huge impediment during the pandemic. What’s worse is that Delaware has watched its sports betting tax revenues drop, as neighboring states with online sportsbooks continue to rake it in. As a result, the Delaware House passed a resolution to form a working group to study the state’s potential legalization of online sports betting.
The House Internet Sports Lottery Legislative Working Group issued its findings earlier this month. It had several online models to consider, given the variance among its neighboring states.
For instance, Maryland allows up to 60 online operators to license directly with the state. Pennsylvania requires online operators to partner with a brick-and-mortar casino or racetrack. Likewise, New Jersey requires online operators to be tethered to a retail establishment, but also allows multiple skins, increasing the competition and subsequent economic activity.
While the report did not identify a specific model for the state, it noted that it wished to protect its existing racetracks, which suggest some level of partnership. It also noted that competition among operators was economically desirable.
The working group got input from Eilers & Krejcik, a gaming research company, which estimated that Delaware could generate an additional $30.7 million in tax revenue over the next five years from online sports wagering, and over $9 million per year thereafter. The consultants concluded that by establishing a “competitive, consumer-driven framework” and the “right tax and licensing structure,” Delaware could significantly increase its tax revenue from sports wagering.
State Representative William Bush, a member of the working group, said. "From our review and our perspective, we think that having more is better for lotteries, because it creates more competition, it ensures that everyone has a good platform, and it allows more options for the public to choose what they want to do."
That said, the state still has a lot to do before that perspective becomes a reality. That includes potentially revisiting its recent agreement with Rush Street Interactive, Delaware’s exclusive online gaming partner.
