The Delaware legislature has received a final recommendation from the Internet Sports Lottery Legislative Working Group, a specialized committee formed to comprehensively explore the prospects of legalizing online sports betting within the state. The report presented by the group supports and advocates for the expansion of online sports betting within Delaware, highlighting the potential benefits and opportunities that such an expansion could bring to “The First State.”
The group explored strategies adopted by nearby states like New Jersey, Pennsylvania, and Maryland in their online sports betting frameworks, presenting potential approaches for Delaware’s consideration. Examining these states’ models which include the presence of multiple online sports betting operators, the Internet Sports Lottery Legislative Working Group illustrated the potential for Delaware to cultivate a more competitive and economically vibrant sports wagering market akin to its neighbors.
The report read: “The success seen in states with multiple online operators suggests that Delaware could benefit from a similar approach, encouraging a more competitive and economically thriving sports wagering market.”
State Representative William Bush shared insights on the report, emphasizing the significance of having a diverse array of operators. According to Bush, the presence of multiple operators not only broadens the spectrum of choices for bettors but also fosters healthy competition within the market, ultimately enhancing the overall betting experience for consumers.
He further highlighted how this diverse landscape benefits the betting community, enabling individuals to find platforms that best suit their preferences and needs.
“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,” Bush said.
In the upcoming session of the Delaware legislature, the recommendations presented by the working group will be thoroughly assessed and discussed.
Group’s Recommendation Contradicts Delaware Lottery’s Agreement with RSI
The creation of the Internet Sports Lottery Legislative Working Group was initiated via House Resolution 6 in January this year, outlining an initial working deadline of June 2023 for their comprehensive report submission. However, owing to delays in the group’s recommendations, the deadline was exceeded.
In response, under the Delaware procurement laws, the Delaware Lottery pursued an exclusive agreement with Rush Street Interactive (RSI) in August, designating them as the sole operator for both online and retail sports betting activities.
Helene Keeley, Delaware Lottery Director, had said: “We waited for quite a bit of time before actually signing that contract with RSI, but it was very clear that many Delawareans wanted us to provide a local sports app.”
Richard Schwartz, CEO of RSI, spoke about the partnership, highlighting the brand’s steadfast commitment to delivering quality services and the profound trust placed in their capabilities by the state.
“We are honored to be selected by the Delaware State Lottery selection committee to provide online gaming operations in the First State,” he said. “This partnership is yet another significant milestone for RSI, as the confidence of a state-backed organization, such as the Delaware Lottery, further validates the trust that lottery officials have in our award-winning online platform and customer service.”
Despite RSI’s pending launch in the state, the group’s proposed recommendations directly contradict the existing agreement between the state lottery and RSI.
According to Keeley, the lottery’s collaboration with RSI stands as the most financially beneficial choice for The First State. However, she emphasized the department’s commitment to adhere to any legislative decision. Keeley noted that if the legislature sanctions multiple operators, the lottery will engage in renegotiations with RSI to align with the new directives.
“We will implement what the legislature tells us to do, however, the lottery believes that one vendor is sufficient for the state of Delaware,” she said. “I’m sure they [RSI] would want different parameters.”
Operators Forecasted to Generate $30.7 Million in Revenue Over Five Years
In their comprehensive recommendations, the group integrated insights from a prominent research and consulting firm, Eilers & Krejcik. These projections underscore the significant advantages for the state’s revenue through the implementation of multiple sportsbooks.
Should Delaware adopt a multi-operator system, the state stands to accumulate an estimated $30.7 million in sports betting tax revenue over the initial five-year period, with a subsequent annual projection of $9 million.
“It is quite clear that the absence of online sports wagering is detrimental to our revenue in Delaware when our surrounding states have online sports wagering. During our meetings, it was demonstrated that there have been many attempts to place online bets in Delaware. This is lost revenue for our state. It is also clear from our surrounding states that the use of multiple online operators creates a greater volume of wagering and online usage. It is our recommendation that online operators need to be tethered to our existing video lottery agents,” the group’s final recommendation read.