Delaware Multi-Operator Sports Betting Proposal Clears First Committee

A bill to create a competitive sports betting market in Delaware cleared its first hurdle, passing the Delaware General Assembly’s House Administration Committee. House Bill 365 (HB 365) now sits with the House Appropriations Committee, which must consider the proposed legislation within twelve legislative days.

Introduced by Rep. Franklin Cooke in April and backed by eight additional sponsors, HB 365 proposes that Delaware allow multiple legal sports betting operators. Currently, state legislation only permits a single, exclusive operator.

Since late last year, Rush Street Interactive’s (RSI) BetRivers platform has enjoyed that exclusive status after taking over from Delaware’s previous provider, 888. In the months since, 888, now known as Evoke, decided to exit the US consumer gambling market completely.

Notably, Delaware’s gaming revenues have soared since BetRivers replaced 888. In its current form, the bill wouldn’t impact RSI’s monopoly on Delaware online casino gaming, as it only applies to sports betting.

With this legislation, lawmakers hope to give players more choice while continuing the growth trend. However, detractors—including RSI, horse racing proponents, the Delaware lottery, and the state finance department—argue that Cooke’s bill will do the opposite.

HB 365 Offers ‘Better’ Betting Framework, Says Sponsor

During the bill’s introduction at the Administration Committee’s mid-week meeting, Cooke explained it incorporates the findings and recommendations of the legislature’s Internet Sports Lottery Legislative Working Group. Cooke chaired the group with Rep. William Bush, another of HB 365’s sponsors.

Cooke said computers, smartphones, and other online devices are now the primary ways Americans participate in legal sports betting. He also noted Delaware was the last state in the region to authorize online sports wagering and the only one with a single operator.

After considering sports betting in surrounding states, tax and licensing requirements, additional problem gambling requirements, and protection of the existing lottery, casinos, and horse racing industries, Cooke said the group concluded Delaware should adopt a competitive sports betting framework. Within that, he said the bill requires that online sports betting operators tether their offering to “existing brick-and-mortar casinos.”

Additionally, he said the bill includes protections for the horse racing industry to ensure that there is no impact on race purses.

He also noted that despite higher revenues, Delaware’s fees to RSI for site hosting, servers, advertising, marketing, payment processing, and geocompliance have significantly reduced any BetRivers-induced improvements.

Specifically, Cooke added that since BetRivers took over, related costs have tallied $2.2 million.

Delaware has had mobile sports betting through the BetRivers platform for more than four months. Despite what you may have been told. It is not producing significant revenue for the state.

House Bill 365, he added, would adopt a “better” framework, more “consistent” with those in successful sports betting states. BetRivers, meanwhile, would be exempt from the legislation’s requirements and “authorized to continue its contract with the lottery.”

Rep. Cooke Laments Sports Betting Timeline

Cooke also expressed frustration with the timing of the lottery’s decision to add online sports betting, particularly after legislators urged the lottery for a temporary hold.

Delaware did not have mobile sports betting when the working group made this recommendation. We do now because the lottery office issued a contract in the fall of 2023 to Rush Street Interactive, which operates the BetRivers platform.

The lottery office issued this contract despite the fact that 17 legislators, including Speaker Longhurst, Senate President Pro Tempore, and all the Senate leadership, wrote a letter in April 2023 urging the lottery office not to implement mobile sports betting before the General Assembly deliberated adopting enabling legislation.

Bill Detractors Claim State Revenues Will Suffer

During public comments, detractors—including RSI, the Delaware Lottery, and horse racing interests—warned that Delaware gaming revenue would only worsen under HB 365.

Rebecca Goldsmith, Delaware’s acting secretary of finance, also spoke against the bill, citing an expected annual financial loss of $3 million under the new rules.

In an “apples-to-apples” comparison of the current and proposed legislation, Goldsmith said the state would have earned $725,000 less between January and April. Passing the bill, she added, would put Delaware “back to square one.”

Along with others, including RSI, she also noted several companies supporting HB 365 had previously declined to bid to become Delaware’s exclusive online supplier.

Speaking for RSI, Adam Marchuk also countered criticisms of BetRivers’ initial Delaware revenues during his comments.

I’ve heard some criticisms of our performance, but we are on pace to meet and exceed our projections for the Delaware online sports betting market this year and for years to come.

The response for our products has been tremendous.

Aside from direct revenue implications, House Minority Leader Mike Ramone raised additional concerns over a possible RSI legal challenge if the bill passes.

Said Ramone:

The way everybody loses is when we end up in court. I’m just stating—if I were the owner and this [bill] went through, in any format, without my involvement or cooperation—[the state] gets sued, not [the other vendors].

Proponents Argue Competition Grows Taxable Revenue

Speaking at Rep. Cooke’s request, Sports Betting Alliance (SBA) lobbyist Jamie Nutter explained the industry’s disinterest in Delaware’s initial RFP and countered Goldsmith’s revenue argument.

As the RFP initially presented, Nutter said Delaware was seeking a white-label option, meaning the successful bidder would provide the technology but not the brand. That, he said, wasn’t of interest to companies like Fan Duel and DraftKings, which depend heavily on brand recognition.

Further, Nutter cast doubt on the revenue projections, citing “inaccurate assumptions.” Primarily, he said SBA doubts BetRivers is “capturing the entire Delaware market.” Nutter cited evidence from FanDuel and GeoComply showing Delawareans are still trying to access unregulated platforms and out-of-state markets.

He added:

History has been that competitive markets produce higher taxable gross gaming revenue.

Of course, companies hoping to gain a Delaware Sports Betting license, like FanDuel, DraftKings, BetMGM, and Caesars, joined the SBA in supporting the legislation.

John Pappas, who represents the iDevelopment and Economic Association (iDEA), an online gambling lobby group, was also present.

Pappas noted an iDEA-commissioned study that found the most successful state sports wagering programs “cultivate competition in the marketplace.”

Pappas added:

In states where there is a competitive market, there is a 50% increase in earnings with multiple operators resulting in obviously additional tax revenue for the state. The findings of the study are very clear: the more brands are allowed to operate online gaming in a state under a competitive model, the more land-based operators benefit, online operators benefit, and the state benefits.

What Will Win, Brand, or Offering?

Should HB 365 pass, it will provide an interesting comparison to Connecticut.

Connecticut allows a duopoly for iGaming alongside a third, sports-only license. Previously, RSI held that license, operating its Sugarhouse Sportsbook brand in the state. However, RSI excited the deal two years later, with Fanatics eventually taking over.

It would have been challenging for a standalone sportsbook to compete with DraftKings and FanDuel’s hybrid casino/sports platforms.

However, if Delaware enacts this new law, that situation becomes reversed.

Are the DraftKings and FanDuel brands powerful enough to beat a BetRivers online casino-sportsbook hybrid with sports-only plays? Or does a full menu always trump single-vertical offerings?

Delaware may soon provide an answer.

About the Author

Robyn McNeil

Robyn McNeil

Robyn McNeil (she/they) is a Nova Scotia-based writer and editor, and a lead writer at Bonus. Here she focuses on news relevant to online casinos, while specializing in responsible gambling coverage, legislative developments, gambling regulations, and industry-related legal fights.
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