Delaware Seeks Expansion of Sports Betting Competition
The First State Wants More Betting Options
Online sports betting is already legal in Delaware but lawmakers in the state are looking to expand the sportsbook offerings. Currently, BetRivers is the only option for Delaware sports bettors. A bipartisan group of legislators has proposed House Bill 365 which would allow the state’s three casinos to partner with up to two online sportsbook operators each instead of being forced to use BetRivers. This Delaware sports betting expansion would open the door to big names like DraftKings and FanDuel operating in the state in partnership with the existing casinos.
Democratic state representatives Frank Cooke and William Bush and Republican state representative Michael Smith are the co-sponsors of the bill seeking to put Delaware on the same level as neighboring states — like Maryland and Pennsylvania — regarding online sports betting accessibility, such as NBA betting. Options have been limited in Delaware since online betting legalization a few months ago, and HB 365 wants to open things so the state can receive more tax revenue and provide residents with more options.
The next step in the process for this bill is consideration by the House Administration Committee. On its face, this proposal seems to have wide support but surely will be opposed by BetRivers, which essentially has a monopoly over the state’s online betting market as of right now. If larger operators are allowed to enter, BetRivers would lose much of its market share and could have a tough time competing with the big names.
Operator Tax Would Be Pretty Low
As currently constituted, any mobile sports betting operators would have to pay an 18% tax on all revenues to the state as well as a 1.5% tax to the horse racing industry in which their partner casino is involved in. Delaware’s three casinos are Bally’s Dover, Delaware Park, and Harrington Raceway. Bally’s Dover and Harrington Raceway have harness racing while Delaware Park has thoroughbred racing.
Accordingly, an operator partnered with Bally’s Dover or Harrington Raceway would pay the 1.5% tax toward harness racing, and an operator partnered with Delaware Park would pay the 1.5% tax toward thoroughbred racing. The Delaware sports betting expansion would also require operators to pay a $500,000 fee for a five-year license.
Of all the money the operators send to the state, either $400,000 or 3.5% of proceeds—whichever is higher—would go to the Delaware Division of Substance Abuse and Mental Health to help those with gambling addiction.
All in all, this would seem to be pretty good for sports betting operators who can push expert betting picks at a relatively low overall tax rate and initial overhead cost. Delaware is a pretty small state both geographically and population-wise, but it’s right in the New York-DC corridor and close to major population centers. It’s also a big summer vacation spot, so there will be no shortage of residents and visitors looking forward to utilizing expanded betting offerings.
What’s The Timeline?
Well, there’s no predicting how long it will take the House Administration Committee to consider HB 365 and decide on the Delaware sports betting expansion. However, if the bill were to become passed and signed into law, then the Delaware Lottery — which is the sports betting regulator in the state — would have five months to initially implement its regulations. Unfortunately, because it is already April, that could mean that the new operators and rules may not be in place for the beginning of the NFL season.
Not being ready to go for the kickoff of Week 1 is not the end of the world, but it would cause the operators, the casinos, and the state to miss out on a significant portion of revenue. Gambling on football always trumps gambling on other sports as operators and states usually struggle to achieve the kinds of revenue and profits during the non-NFL months as they do when the NFL season is ongoing.
The bill still includes a prohibition on in-state college sports wagering, such as games involving the University of Delaware and Delaware State University. This prohibition is becoming more and more common around the country because of concerns that the increased money available to college athletes through NIL could, in some way, lead to potential match-fixing. So, it does make some sense to prevent scores and odds for in-state college games from being on the market, even though it’s just as easy for a Delaware bettor to try and rig a game involving Pennsylvania or Maryland colleges, for example.
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