Delaware will remain an online sports betting monopoly as the proposed legislation to create a multi-license system has failed to pass. HB 365 failed to gain the necessary traction with lawmakers before the state’s legislative session ended on June 30. As a result, BetRivers will remain Delaware’s sole online sports betting operator.
In April, Rep. Frank Cooke introduced HB 365, which would allow up to six sports betting skins, two for each of the state’s three retail casinos. The proposal came only a few months after BetRivers took over as the state’s sole operator after 888 Holdings’s 10-year deal expired. Cooke and co-sponsor Rep. William Bush form part of the House Internet Sports Lottery Legislative Working Group, a task force charged with evaluating and making recommendations for the future of sports betting in Delaware.
After comparing Delaware to neighboring states, the task force concluded that the state should switch to a multi-license system. While HB 365 passed in the House Administration Committee in May, it bogged down in the House Appropriations Committee.
Delaware Lottery Supports Continued Monopoly
The bill was expected to face pushback. Opposition came from multiple stakeholders, including the Delaware Lottery, BetRivers owner Rush Street Interactive (RSI), and horse racing interests.
After the task force released its findings in December 2023, Lottery Director Helene Keeley said she didn’t think the multi-license model would increase revenue. She pointed out that the state’s single operator and one million residents is the same per capita ratio as Pennsylvania’s 13 operators and 13 million residents. Keeley said the deal with RSI brings the state more than the new system would.
During public comments for HB 365, Rebecca Goldsmith, Delaware’s acting secretary of finance, backed Keeley’s remarks. She calculated that the state would lose $3 million annually under the proposed multi-license rules. Adam Marchuk from RSI added that the response to BetRivers has been “tremendous.”
Marchuk said that the company is on pace to meet and exceed projections. Latest monthly revenue data backs RSI’s comments, showing strong growth:
- March 2024: $18.9 million in handle (up 442.4%) and $1.03 million in net proceeds (up 89.2%).
- April 2024: $15.5 million in handle (up 349.9%) and $1.01 in net proceeds (up 171%).
- May 2024: $15.1 million in handle (up 447.2%) and $1.06 million in net proceeds (up 329.8%).
Lawmakers Not Convinced of Multi-Licensing Merits
During the bill’s introduction, Rep. Cooke said that while revenue is higher with the new platform, Delaware is also paying higher fees for it. These include site hosting, marketing, geocompliance, and payment processing. According to Cooke, those costs have significantly reduced the impact of the BetRivers improvements.
Still, many other lawmakers weren’t convinced of the proposal’s benefits. House Minority Leader Mike Ramone expressed concerns over the potential for legal challenges from RSI, which feels it was promised a monopoly. Meanwhile, Rep. Peter Schwartzkopf, a co-sponsor of HB 365, told PlayUSA that even though he co-sponsored the proposal, he wasn’t sold on it. While he’s in favor of multi-licensing in principle, he would have liked to hear more about how the bill’s expected impact on the state’s bottom line.
Between that lack of information and a hectic end to the legislative session, the proposal stalled out and didn’t make it to the floor before the end of the session. However, the debate could reemerge in 2025, with the benefit of a full year’s worth of BetRivers’ performance data and perhaps additional insights from other markets.
RSI Has Also Revitalized Delaware’s iGaming Revenue
HB 365 addressed sports betting only and wouldn’t have impacted BetRivers’ monopoly on Delaware online casino gaming. However, RSI would surely be worried that if multi-licensing proved to be a massive success for sports betting, lawmakers might begin to think about doing the same for iGaming.
Online sports betting is a new thing for Delaware, having debuted with BetRivers. However, it was the first state to launch online casinos, way back in summer 2013.
Online casino revenue has soared since RSI took over from 888. In January, the first full month after the switch, iGaming revenue nearly tripled. While in May it took a slight dip compared month-to-month, revenue continues to see strong growth year-to-year:
- January 2024: $3.41 million (+186.5% y/y)
- February 2024: $3.87 million (+232.7% y/y)
- March 2024: $4.63 million (+224.7% y/y)
- April 2024: $4.44 million (+243.1% y/y)
- May 2024: $3.90 million (+216.3% y/y)
The likely reason for the increase is a superior platform and a broader selection of games. Additional growth may come shortly, thanks to the launch of live dealer games in Delaware on July 2 through an extension of an existing partnership between RSI and Evolution Gaming. The segment has been vital to iGaming growth and will likely boost short-term revenue.
However, while RSI has significantly boosted revenue, player excitement may eventually wane. The danger is that players who are frustrated with their legal options may turn to illegal offshore casinos. That’s one solid argument for a multi-operator model for iGaming, even in a small market like Delaware. Some international markets like Sweden, Denmark, and the Canadian province of Ontario have shown evidence that moving from a monopoly system to a privatized multi-license one does increase revenue and reduce illegal casino usage.
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