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The online gaming market in Delaware could get a lot more competitive if a new bill submitted in the state’s House of Representatives becomes law.
The bill, known as HB365, would expand the number of online sportsbooks in the state, effectively ending BetRivers’ reign as the sole platform for online sports betting and casinos. The bill’s language would allow up to six sports betting operators instead of one.
Key takeaways
- BetRivers is Delaware’s only online casino and online sports betting provider.
- A new bill could welcome five new mobile sports betting operators to the state.
- BetRivers will remain the online casino site, but that could change in 2028.
- The Delaware Lottery and Rush Street Interactive oppose the bill.
How HB365 would change Delaware’s online gaming landscape
From an online casino perspective, HB365 could have considerable implications.
BetRivers is locked in as the sole Delaware online casino provider through 2028. Should HB365 (or a similar bill) become law, it’s possible that we could see a push to open up online casinos to multiple operators, too. Two factors could push that expansion:
- Lawmakers will see how much revenue a diverse online sports betting market will generate and then want the same for online casinos.
- Delaware and Rhode Island are the only two states in the country with a single online casino operator. In Rhode Island, the online casino single-operator makes sense because that operator, Bally’s, is headquartered in Rhode Island. However, Delaware’s deal with Chicago-based Rush Street Interactive, which owns BetRivers, doesn’t have that same local link.
With these two factors in mind, lawmakers would be hard-pressed not to open up the state’s online casino market after it does so with online sports betting. More operators likely means more tax revenue, which means the state’s citizens benefit through increased contributions to Delaware’s General Fund.
After accounting for operating expenses and responsible gaming programs, online gaming tax revenue goes to Delaware’s General Fund. Per the Delaware Lottery, the General Fund provides money for:
- Education
- Health and social services
- Public safety
- Judicial and corrections operations
- Child, youth, and family services
- Natural resources and environmental control
With so much potential gaming revenue benefit built into expanding the Delaware online casino market, it’s hard to imagine a world in which BetRivers remains the state’s sole iGaming operator after its contract ends.
How HB365 would change Delaware sports betting
At present, BetRivers’ online sportsbook and online casino are the only places Delaware bettors can go for iGaming. Delaware’s HB365 would change that by allowing the state’s three “video lottery agents” (companies with a license to provide iGaming) to partner with up to two mobile sportsbook operators.
If the bill becomes law, we could see BetRivers move from the driver’s seat to the stands as major operators such as FanDuel and DraftKings dominate the state’s revenue.
BetRivers (NYSE: RSI) moving from a major player to a minor player in Delaware online sports betting says nothing about the platform’s user experience and everything about FanDuel and DraftKings’ ability to capture anywhere from 75% to 85% of a given state’s sports betting market. The two companies carry tremendous brand recognition, and will likely dominate the Delaware market if HB365 passes.
State lottery director, Rush Street slam new bill
In statements provided to PlayUSA, BetRivers owner Rush Street Interactive (RSI) and Delaware Lottery Director Helene Keeley vehemently opposed the new bill. At the core of their resistance is the tax rates HB365 proposes. Delaware’s state law mandates the following tax rates for sports betting revenue:
- 50% contribution to the state’s general fund
- 40% is paid to the operator’s land-based partner which, in Delaware, are horse tracks
- 10% is used to boost horse horses purses
HB365 would eliminate that structure and reduce the tax rate to 18% and 1.5% would be sent to Delaware’s horse racing governing bodies. Additionally, the tax rate would be based on an operator’s adjusted gross receipts, a metric allowing operators to subtract free bets from their revenue numbers.
Those three factors spell doom for the state’s tax coffers and Delawareans, Keeley said.
“The Delaware Lottery’s job is to maximize state revenues,” she said. “HB 365 would reduce State revenues, negatively impact the state’s equine and agricultural industries, and exacerbate problem gambling … 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.”
Keeley noted that RSI has done an excellent job running the state’s online casinos and sportsbooks, which RSI brought up to PlayUSA, too.
“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,” the company said.
Additionally, RSI believes the new bill is a slap in the face to the work it put in to clear regulatory hurdles to be the state’s sole online gaming operator.
“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),” RSI said, “and to Delaware’s horsemen and women and tracks and the jobs they support, and upend the longstanding Lottery-based gaming model in Delaware.”
