Delaware Legislator Highlights Competition's Role in Sport Betting's Prosperity
A proposed law in Delaware, which would allow more than one online sports betting platform, is gaining traction in the state legislature.
In April, State Representatives Franklin Cooke (D-District 16) and William Bush (D-District 29) introduced House Bill 365. The bill aims to end the monopoly of the Delaware Lottery on online sports betting and permit up to five more sportsbook platforms.
According to Cooke, permitting multiple operators would create income for the state and ensure the Delaware Lottery office remains competitive with neighboring states. "There is significant consumer demand for multiple operators," Cooke told reporters.
Currently, there's a trend of Delawareans driving to Maryland, Pennsylvania, and New Jersey to use their preferred mobile apps.
Financial Forecasts
The Delaware Lottery allied with Rush Street Interactive, the digital gaming arm of Chicago-based Rush Street Gaming, last year, as 888 Holdings, its previous partner, exited the market. Rush's BetRivers mobile app is now responsible for iGaming and online sports betting on the state's behalf. Rush manages retail sports betting at Delaware's three physical casinos and other wagering locations.
Since BetRivers took over the online gaming operations, earnings have boosted significantly. Presently, Rush and some state officials believe introducing more sports betting firms would result in net revenue loss for the state.
"We've heard some negative feedback about our performance, but we are projected to satisfy and surpass the estimated revenue for Delaware online sports betting this year and beyond," Adam Marchuk, vice president of legal at Rush Street Interactive, said to Delaware Public Media. "If the market remains constant, the state without a doubt earns more revenue — receives more revenue — under the single operator model, as per the fiscal note."
State lawmakers opposing Cooke's bill argue revenue would decline if the lottery welcomed further operators. Under the current deal, BetRivers is obliged to provide about 58% of its gross revenue to the lottery, funding the General Fund and the horse racing industry. Cooke's bill stipulates a $500,000License fee for a five-year license, with gross sportsbook winnings taxed at 19.5%, with 18% reserved for the lottery and 1.5% for horsemen.
Possible Legal Battle
Cooke insists the state would gain from a wider online sports betting market, citing the low visibility of Rush’s BetRivers compared to DraftKings, FanDuel, BetMGM, and Caesars Sportsbook as a possible deterrent for potential bettors. State financial officers, however, anticipate the state's annual sports betting tax advantage would decrease by $3 million should the lottery lose exclusivity.
Should HB 365 progress, Rush could contest the state law. The bill passed through the House Administration Committee last week and is currently under assessment in the House Appropriations Committee.
Rush Street, the sole applicant for the online gaming contract in the past, won the right to work for five years. It was not disclosed if Rush paid the lottery an upfront fee for the iGaming and sports betting rights.
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