House Bill 365 is legislation designed to increase the number of Delaware’s mobile sports betting providers; therefore, it is not surprising that the entities currently controlling that market are strongly against the bill.
Monopoly Market
To better understand what’s happening now, it is best to explain how we got here. Delaware was at the forefront of iGaming in America, having launched in 2013. Although only a handful of states have followed suit with online casino gaming, dozens have launched mobile sports betting since PASPA, the law outlawing sports betting in the vast majority of jurisdictions in the United States, was overturned by the SCOTUS in 2018.
Delaware tapped 888 Holdings to run its iGaming site, granting the Gibraltar-based company a 10-year deal that expired in 2023. Fast forward to last year when Delaware put the expiring contract out to bid and only two companies responded, 888 Holdings and Rush Street Interactive (RSI). However, 888 Holdings subsequently withdrew its bid leaving RSI as the lone bidder.
Ultimately, RSI was awarded the contract and after launching its iGaming platform in December 2023, the company decided to launch a mobile sports betting platform, something 888 Holdings never did, through its BetRivers brand. BetRivers’ digital sports betting launch occurred in December 2023 as well.
The Market Study
But it should also be known that at the same time in January 2023 when the state went out to bid, House Resolution 6 passed, which authorized a sports betting market study to research how the state could maximize profits, whether it be with a sole operator or multiple mobile sportsbooks.
The findings of the study came back nearly a year later, at just about the time BetRivers was launching its iGaming and sports betting platforms. Needless to say, an inconvenient truth arose when the results advised multiple sportsbooks would be preferable to just one.
Based on that research study, Representatives Frank Cooke and William Bush put forth an amendment, House Bill 365, to the state’s sports betting bill, which would allow for up to six mobile sportsbooks in which the state’s three casinos would get two skins (tethered mobile sportsbooks) apiece.
Objection!
It was not surprising that Rush Street Interactive vehemently objected to the amendment after being awarded a five-year contract under the premise it would be the state’s only sports betting provider. Upon learning of HB 365, both RSI and the Delaware Lottery were not shy about vocalizing their displeasure.
Helene Keeley, the Executive Director of the Delaware Lottery, said, “The Delaware Lottery’s job is to maximize State revenues. HB 365 would reduce State revenues, negatively impact the State’s equine and agricultural industries, and exacerbate problem gambling by significantly increasing ‘free’ bets and promotions. If enacted, the bill would shift State revenues to sports wagering companies and also trigger federal excise taxes.
“The Delaware Lottery’s new mobile sports and iGaming application – offered by the State’s three casinos via the BetRivers app – was awarded through an open, public competitive bid process. It’s performing extraordinarily well. In March, overall sports lottery handle and mobile casino lottery net gaming revenue increased 440% and 225% respectively versus the prior year.
“HB 365’s proposal to license multiple mobile sports gaming businesses to compete with ourselves would not ‘grow the pie’ but instead lead to smaller slices of pie – especially for state taxpayers.”
Rush Street’s Opinion
A Rush Street spokesperson also commented on the bill in a statement:
“After a thorough State procurement process, including a formal RFP that only concluded less than a year ago, RSI was selected by the Delaware Lottery to operate both iGaming and mobile sports betting for the State. In reliance on the Lottery’s contract award, RSI invested substantial amounts of time and money to produce an outstanding product for the Lottery and Delawareans.
“The early results from RSI’s operation have been tremendous, with the State of Delaware’s online gross gaming revenue in March alone being 300% greater than the previous all-time high during the 10-year history of iGaming in Delaware.
“Now, having either participated in the RFP process and lost, or having chosen to not enter a well-publicized procurement process, a group of sports betting companies with no connection to or investment in Delaware are seeking to do an end run around the Delaware Lottery with a bill that would significantly reduce revenue to the State (resulting in less money available to fund key State programs) and to Delaware’s horsemen and women and tracks and the jobs they support, and upend the longstanding Lottery-based gaming model in Delaware, which requires that gambling be controlled by the Lottery.”
OddsTrader will continue to monitor this story and update our readers as events unfold.
