Although Delaware is small in size, it has had a large stature in the area of sports gaming. Delaware has been a pioneer with regard to innovation and pushing for legalized sports gambling. The state had one of the few legal sports gaming offerings prior to the Supreme Court’s decision in Murphy vs. National Collegiate Athletic Association. In addition, Delaware has also been a trailblazer with regard to online poker.
History of Legal Gambling in Delaware
Historically, Delaware has offered some sort of sports betting. In 1976, the Delaware Lottery made one attempt at offering a type of sports betting. This game allowed players to place parlay bets on football of three teams or more. This effort lasted only briefly, but it was important as it allowed Delaware to become grandfathered for an exception when Congress passed the Professional and Amateur Sports Protection Act of 1992. PAPSA banned sports betting nationwide. The prohibition in the legislation applied to new state laws that would permit sports betting. States that already had laws permitting sports gambling on the books were permitted to continue to offer sports betting in accordance with those statutes. Delaware’s law that enabled the 1976 program was still in existence even though the program was no longer offered.
In an attempt to broaden state gambling revenues, Delaware attempted to offer casino betting on multiple sports that extended beyond just parlays. This soon was contested in litigation. In 2009, the U.S. Court of Appeals enjoined Delaware from offering expanded sports betting. According to the Court, the exception from PAPSA only applied to the type of betting that existed prior to the enactment of PAPSA. For Delaware, that meant that the state could only offer parlay bets on professional football. Even this limited form of betting, which is extraordinarily difficult for bettors to win, resulted in $46 million of handle during the 2017 NFL season.
In the wake of Black Friday, Delaware became the first state in the country to legalize online poker. In 2012, Delaware passed this legislation which allowed the state’s three racinos to offer online games on behalf of the Delaware Lottery. The language in the bill was broad enough to legalize not only online poker, but other online table games as well. After the Delaware Gaming Control Board issued regulations, live play started online in 2013 and was immediately successful. Delaware players recently gained the ability to compete against poker players in New Jersey and Nevada through a multi-state compact.
Delaware was ready to offer sports betting online in very short order after the Court’s decision in Murphy. Through its previous attempts to legalize sports betting, Delaware already had existing laws on the books, along with a regulatory structure that would quickly support sports wagering. Delaware was able to beat every other state to market after Murphy, including neighboring New Jersey who had fought the court battle to legalize sports betting. Delaware also already had existing infrastructure in place including software partnerships and deals with oddmakers since it had already had legal sports betting.
Online and sports gaming in Delaware is unique in how it is structured. In other states, casinos form partnerships with national online operators. In order to enter the market, these operators need to partner with a land-based casino that already operates in the state. In Delaware, gambling is offered through the state’s three racinos, who offer games on behalf of the Delaware State Lottery. The three casinos are Dover Downs, Delaware Park and Harrington Raceway. These racinos have the sole right to offer online gaming in Delaware. The products include online poker as well as slots and table games. There are no branding agreements. Instead, players go directly onto the casinos’ website and compete there. Delaware is a member of the Multi-State Gaming Compact which allows Delaware players to compete against poker players in other states.
The racinos run online poker using software from Scientific Games Corporation, Williams Interactive LLC and 888 Holdings. In 2013, the state selected these operators to provide it with a turnkey solution for the racinos to use to offer online poker. These providers must obtain and maintain a license in Delaware to offer online gaming technology to the state.
Delaware Does Not Yet Allow Online Sports Betting
With regard to sports betting, the racinos similarly operate with no partnerships. In fact, there is currently no mobile or online sports betting in Delaware. There were rumors that Delaware is going to offer online sports betting at some point, but that has yet to come to fruition. Currently, one has to place a wager in person at one of the state’s three casinos. Delaware was relying on an existing legal and regulatory infrastructure that was in place for close to a decade in order to launch sports wagering quickly. To allow online betting would require that additional legislation be passed and regulations issued. The short timeframe between Murphy and the launch of sports wagering in Delaware did not support the quick launch of online and mobile sports wagering. Instead, Delaware was focused on obtaining the first-mover advantage that it believed would come if it beat the other states to market. Accordingly, it did not want to slow the launch of sports gaming by having to take the time to amend the laws. There is no stated opposition to online sports betting in Delaware, and it is likely that it will commence as soon as practicable.
Given the tough competition that is present in neighboring New Jersey and Pennsylvania, it would certainly make good business sense for Delaware to begin online and mobile sports wagering in the near future. Although sports wagering in Delaware is off to a solid start, the state needs online sports wagering in order to reach its full revenue potential. Without online wagering, state residents that wish to place wagers may end up betting with offshore sportsbooks as opposed to the legal state casinos that benefit the Delaware Lottery. Studies have shown that implementing online sports betting could as much as double the net sports gaming revenue.
Who May Bet in Delaware
Online wagering in Delaware is open to players aged 21 or older. Players must be physically located in the state at the time that they place wagers. In other words, a Delaware player cannot play an online game with a Delaware account when physically located outside of the state of Delaware.
Market Size and Statistics
The Delaware online casino and sports wagering market has the potential to expand. Online poker has recently leveled off in terms of revenue after a hot start, but the more states enter the Multi-State Gaming Compact, the more online poker may achieve popularity in Delaware. For the present, online gaming revenue in Delaware was down 18 percent in 2017 before rebounding in the current year. In 2017, Delaware online casinos banked revenue of approximately $2.4 million. Most of this revenue originated from video lotteries and only a portion of this was from online poker. In fact, total online poker revenue came in at just under $250,000 in 2017 for the entire year. However, the entrance of New Jersey into the agreement providing liquidity resulted in a large percentage jump in Delaware online poker revenue this past May. This trend may be an enduring one as new account registrations at the state’s three online casinos were up sixfold in May.
The sportsbook revenues in Delaware have also been encouraging since inception. Delaware sportsbooks got off to a successful start, accepting more than $7 million in wagers in its first three weeks of operation. Gross revenue was over $1 million, but that reflected an unsustainable hold percentage. Revenues leveled off in the first full month of operation, although July is traditionally a slow month for sports wagering as baseball is the only major sport in progress at that time. It remains to be seen how the launch of sports gaming in New Jersey and Pennsylvania will impact the Delaware market. Eilers & Krejcik Gaming has estimated that sports gaming revenue in the state could grow to over $23 million. The company has projected that the addition of online gaming could double that to just under $50 million.