Delaware lawmakers introduce a bill to allow more than one mobile sports betting option in the state.
In August, the Delaware Lottery selected Rush Street Interactive (RSI) as the state's sole vendor for online gaming operations and in January launched the BetRivers app for mobile sports betting.
After announcing the contract with RSI, The Internet Sports Lottery Legislative Working Group released recommendations advocating for multiple sports betting vendors, and now lawmakers are making a formal legislative push to do so with House Bill 365.
Delaware Lottery Director Helene Keeley says while she believes in healthy competition, due to the small eligible betting population in Delaware, she remains convinced having one vendor is the most profitable path for the state.
She says in March, the overall sports lottery handle and the mobile casino lottery saw a revenue increase of 440% and 225% respectively from last year, and she credits this due to the lucrative contract the state has with RSI.
"To have the multiple mobile sports gaming businesses to compete with ourselves — we don't believe it'll grow the pie, and we think it will hurt the taxpayers," Keeley said. “Our job is to maximize the state revenues and, as written, House Bill 365 would reduce state revenues.”
The bill’s sponsor State Rep. Frank Cooke (D-New Castle) disagrees.
“You should have a multiple choice, and I can make a choice where I want to go to do that – not just one where they monopolize everything," he said. "I don't think we should just be stuck on one sports betting company."
Cooke argues several of the surrounding states allow multiple mobile sports betting operators, including Vermont, which he notes has a significantly smaller population than Delaware.
But Keeley still believes having a singular operator in Delaware is ultimately more profitable than the competitive approach.
“Pennsylvania has [13] million people give or take. They have about 12 or 14 sports vendors because it’s appropriate for the population. We have a million people, we have one vendor – we think it’s appropriate for our population.”
Keeley also notes RSI would be eligible to renegotiate its contract if more mobile sports betting vendors entered the state.
If passed, the bill would allow six mobile sports betting vendors, with two vendors tethered to each of the state's three casinos.
The bill would also require licensed internet sports lottery operators to pay a $500,000 fee for an initial 5-year license, and operators must return 18% of their monthly adjusted gross sports lottery income, which would all largely be returned to Delaware's General Fund.
Pennsylvania allows up to 13 online vendors at a tax rate of 36% gross gaming revenue. New Jersey allows up to 39 with a tax rate of 14.25%.
Although the exact profit rate with RSI is confidential, Keeley previously stated Delaware is getting "a heck of a lot more" than 15%.
Under this legislation, licensed operators will also contribute 1.5% of their monthly adjusted gross sports lottery receipts to the Delaware Thoroughbred Racing Commission or the Delaware Harness Racing Commission to help protect the state's horse racing industry.
The bill has been assigned to the House Administration Committee for consideration.
