It May be a While Before Delaware Online Sports Betting Undergoes Expansion

Dan Favale
By , Updated on: May 14, 2024 08:00 PM
It May be a While Before Delaware Online Sports Betting Undergoes Expansion

When Delaware online sports betting launched to close out 2023, it rolled out with an incredibly limited setup. 

Just one parent online sportsbook in the United States is currently up and running. The operator in question is Rush Street Interactive (RSI), the company behind brands such as BetRivers, PlaySugarHouse and RushBet

On some level, this exclusivity isn’t too unique. A handful of states have embraced sports betting monopolies. Much of the time, though, these singularities are specific to tribal operators. In many cases, because tribes are initially granted exclusivity to state gaming rights, it’s the only way certain places can even legalize sports betting.

This online sports betting in Delaware setup is different. They have opted for a model featuring one mobile betting site by choice. And it’s a corporate sportsbook rather than a tribal entity. 

To be sure, this is neither good nor bad. It’s just a fact. But given the popularity of online sports betting in the United States, this framework is at the very least curious. It makes you wonder why Delaware went this route and whether they’ve left the door open for expansion.

Why Delaware Online Sports Betting Doesn’t Include More Mobile Operators

So why aren’t more mobile betting sites part of the Delaware online sports gambling scene? The answer to this question appears to be twofold. Apparently, it’s an issue of both logistics and demand. 

Jacob Owens explained this further for the Delaware Business Times:

“In the nearly five years since Gov. John Carney put down a successful $10 bet on the Phillies though, Delaware has quickly been outpaced to offer the most common and popular form of sports gambling: mobile sports gambling…While gambling may be established simply through licensure and regulation of gambling companies, as some states have, Delaware is one of only three states where it operates under the state lottery. That seemingly insignificant detail is anything but, according to Delaware Finance Secretary Rick Geisenberger, whose department oversees the state lottery and casinos.

“Under Delaware’s Constitution and state statutes, the lottery is required to operate ‘in a manner which will produce the greatest income for the state.’ Because of that requirement, finance and lottery leaders have been hesitant to wade into mobile betting, which has typically produced a smaller percentage return on revenue for states than its in-person counterpart, where parlays are more likely to be made and more likely to provide income to the state. That concern is coupled with Delaware’s much smaller population than its neighbors, further diluting its ability to drive wagers and income.”

By limiting Delaware sports betting online to one operator, the state continues to incentivize residents to visit physical sportsbooks. That, it seems, is a smaller victory—assuming the revenue margins are that much different. At the same time, the First State may not have many other options at their disposal.

Competition Among Online Sportsbooks to Enter Delaware Market is Pretty Sparse

While Delaware can insist this one-online-sportsbook model is entirely by choice, other variables are clearly at play. That brings us to the limited interest portion of the program.

According to Owens, other top online sportsbooks in the United States weren’t exactly chomping at the bit to win a Delaware sports betting license. In fact, the two leading sportsbooks in the USA, DraftKings and FanDuel, reportedly didn’t even make a bid. 

As Owens already alluded, this likely speaks to the limited demand inside the First State’s market. Delaware ranks 45th out of 50 states in total population, with just over 1 million residents, according to StatsAmerica.org. This inherently limits the amount of business companies can hope to generate.

And yet, there’s a chance the market is being undervalued if this is the case. Delaware has generated nearly $74 million total sports betting revenue since launching back in 2018. On average, that’s more than $12 million in additional tax revenue per year. And considering the First State only nets a portion of the profits, a licensed sportsbook stands to make much more. 

Of course, these figures still may not be enough to render Delaware a priority among industry heavyweights. FanDuel and DraftKings aren’t looking for millions or even tens of millions in additional revenue. They want to turn nine-figure profits—or more. That’s why they’re so hyper-focused on the future of sports betting in California, Texas, Georgia and other premier markets without legal gambling. Those states will invariably be bigger moneymakers.

Don’t Expect Delaware Online Sports Betting Market to Expand Anytime Soon

None of this is to say Delaware had no choice but to grant exclusivity to RSI. It seems like more of a preference than anything else. 

Regardless, some folks are no doubt already wondering when Delaware sports betting online will expand to include more than one provider. As of now, there is no concrete answer. But don’t expect it to be anytime soon.

The agreement with RSI is structured in long-term form. According to Owens, “RSI will operate online gambling in Delaware for an initial term of five years, renewable for additional one-year terms for an additional five years.” Essentially, then, RSI can maintain their online Delaware sports betting monopoly for up to a decade if they so choose.

Granted, things can always change. A decade is a long time. Especially in the sports betting industry. But for the foreseeable future, and for whatever primary reason, Delaware sports betting is locked into RSI as their only online operator.

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Meet the author

Dan Favale

Dan Favale leverages over 12 years of sports journalism expertise in his role as New York staff writer. He provides in-depth analysis across the NBA, NFL, MLB, NHL, tennis, NASCAR, college basketball, and sports betting. Dan co-hosts the popular Hardwood Knocks NBA podc...

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