Delaware Legislature Explores Expansion Of Mobile Sports Betting

April 15, 2024
A bill has emerged from the bipartisan Internet Sports Lottery Legislative Working Group that would expand mobile sports betting in Delaware by allowing casinos to partner with multiple sportsbooks.

A bill has emerged from the bipartisan Internet Sports Lottery Legislative Working Group that would expand mobile sports betting in Delaware by allowing casinos to partner with multiple sportsbooks.

House Bill 365, sponsored by Representatives Franklin Cooke and William Bush, both Democrats, was filed on Thursday (April 11) to make Delaware's online sports wagering market more competitive and bring the state in line with its neighboring states of Maryland, Pennsylvania and New Jersey.

Retail sports betting at the state’s three land-based casinos has been legal in Delaware since 2018. In addition, parlay wagers on professional and college football have been permitted since 2009 and continue to be offered at more than 100 retail outlets.

In late December, Rush Street Interactive (RSI) launched its BetRivers sportsbook after executing a contract last year to serve as the exclusive mobile sports betting and online casino partner of the Delaware Lottery. The BetRivers platform is co-branded in Delaware with the state's three incumbent land-based casinos.

The Delaware State Lottery regulates all sports betting in the state. Under HB 365, the lottery would continue to oversee mobile wagering, but with each of the three casinos authorized to partner with up to two mobile sports-betting operators.

If approved, Delaware, with a population of just over 1m, could have six operators offering mobile wagering.

Bush said the bill would benefit the industry and state revenue. 

“It’s important that Delaware remains competitive and responsive to the preference of residents,” Bush said in a statement introducing HB 365.

“By providing [residents] 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.”

Through the first eight months of fiscal year 2023-2024, the Delaware Lottery reported total “sports sales” of $70.76m, with net revenue of $9.16m and state tax revenue of $6.72m.

In neighboring Pennsylvania, total handle from retail and mobile sports betting for the first eight months of the fiscal year was $5.6bn, generating taxable net revenue of $324.46m after $180.64m in promotional spending was deducted. The Pennsylvania Gaming Control Board has reported state tax revenue of $110.31m in the fiscal year to date.

In terms of tax rates, Pennsylvania’s headline rate is 36 percent, while Delaware employs a revenue-sharing model which amounts to an effective tax rate of approximately 50 percent.

The introduction of HB 365 follows the work of the Internet Sports Lottery Legislative Working Group, a bipartisan group formed in the House in 2023 that was tasked with evaluating and making recommendations on authorizing mobile sports betting. By the time the working group released its findings in December, however, the Delaware Lottery had already executed its exclusive contract with RSI.

Under HB 365, licensed internet sports lottery operators would be required to pay a $500,000 fee for an initial five-year license and be taxed at 18 percent of adjusted gross sports-betting revenues. Licensing fees will be directed to the state’s general fund, according to a synopsis of HB 365.

Operators would also be required to contribute 1.5 percent of adjusted gross sports-betting revenues for purses overseen by the Delaware Thoroughbred Racing Commission or the Delaware Harness Racing Commission.

Senator Spiros Mantzavinos, a Democrat and the Senate’s prime sponsor of HB 365, said by creating a regulatory structure that allows Delaware casinos to partner with multiple sportsbooks, “we can better ensure legal gaming sites are providing consumers with the best value.”

“The addition of online sports betting,” Cooke added, “means additional revenue will benefit programs for the treatment, education and assistance of compulsive gamblers and problem gambling.”

“We’re talking about $400,000 or 3.5 percent of the proceeds returned to the state for funding these programs,” Cooke added. “Those dollars will go a long way.”

The measure has been assigned to the House Administration Committee. Cooke said he was confident supporters could get the bill through the legislature and onto Democratic Governor John Carney’s desk.

The Delaware General Assembly is in recess until Tuesday (April 16) but will be in session until its planned adjournment on June 30.

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