Internet Sports Lottery Legislative Working Group Released Its Final Recommendations on the Future of Online Sports Betting in Delaware

DOVER, Delaware (December 1, 2023) — After a five month delay, the Internet Sports Lottery Legislative Working Group released its final recommendations on the future of online sports betting in Delaware.

The task force was initially created by House Resolution 6 in January of this year to craft recommendations on how the state should navigate online sports betting by the end of June.

When the task force delayed their recommendations, under Delaware procurement laws, the Delaware Lottery decided to move on with naming Rush Street Interactive (RSI) as the state’s sole online gaming and online sports betting vendor for the state.

We have omitted the first part of the report because of space limitations However, the final report states:

Lessons For Delaware

Delaware can draw valuable lessons from these neighboring states. The variety in licensing models, from Maryland’s direct license application to the tethered approach of Pennsylvania and New Jersey, offers Delaware different paradigms to consider for its own market structure. 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. The evidence from these states indicates that a well-structured and competitive market can lead to increased state revenues, better consumer products, and a more robust industry overall.

Delaware’s Potential Tax Revenue Opportunity

According to estimates by Eilers & Krejcik, Delaware could generate $30.7 million in tax revenue over the next five years from mobile sports wagering, and over $9 million per year

thereafter, by establishing a competitive, consumer-driven framework. These projections suggest that with the right tax and licensing structure, Delaware can significantly increase its revenue from sports wagering.

CONCLUSION

After doing an analysis, it is the working group’s recommendations that:

• Delaware needs to have an online sport lottery;
• Delaware needs to have multiple online sports lottery operators(skins);
• Delaware should provide for a tethered model with existing video lottery agents;
• Delaware should protect the horse racing industry and purse contributions; and
• Delaware should provide additional resources for problem

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. Market access agreements can help both the online operator and the brick-and-mortar lottery facility and ultimately create greater revenue for the state. While multiple online operators are important, this working group does not believe that there should be more than two online operators per each brick-and-mortar lottery facility. In our expansion into online sports betting, the state must protect contributions to purses from the sports lottery. It is imperative we protect our horse racing industry. When we pursue an online sports lottery the contributions to purses must not be lower than the contributions to purses at the time the online sports lottery begins. Lastly, we need to ensure that with expansion into online sports betting, our resources for problem gambling expands.

Click Here to download the entire pdf report: InternetSportsLotteryWorkingGroupReport