Delaware’s Online Sports Betting Dilemma: Single Vendor vs. Multiple Operators

After a significant delay, the Internet Sports Lottery Legislative Working Group has released its final recommendations, presenting a potential shift in the state’s approach to online sports wagering.

Background and Current Scenario

The task force, established by House Resolution 6, was initially set to provide guidance on the state’s direction in online sports betting by June.

However, due to delays in their recommendations, the Delaware Lottery moved forward with appointing Rush Street Interactive (RSI) as the exclusive online gaming and sports betting vendor.

Delaware Lottery Director Helene Keeley highlighted the local demand for a sports app, leading to the contract with RSI. But, the working group’s final report challenges this single-vendor approach, advocating for multiple online sports lottery operators.

This suggestion aims to foster competition, enhance platform quality, and offer more choices to the public, as stated by State Rep. William Bush.

Legislative Decisions Ahead

These recommendations, however, are not set in stone. The Delaware legislature will have the final say in determining the legal framework for online sports betting. The working group’s advice draws inspiration from states like Maryland, New Jersey, and Pennsylvania, which have adopted multi-operator models.

The report suggests that Delaware could benefit economically from a multi-operator system, similar to the successes in other states. Conversely, Keeley asserts that the current contract with RSI presents the most financially beneficial option for Delaware, offering significantly more than a 15% profit rate.

The approach varies significantly among states. Maryland has provisioned for up to 60 vendors, Pennsylvania allows up to 13 with a 36% tax rate on gross gaming revenue, and New Jersey permits up to 39 operators at a 14.25% tax rate.

Our Comment on the Article

The debate in Delaware encapsulates a critical issue in the burgeoning online sports betting industry: the balance between economic efficiency and market competitiveness. While the single-vendor model under RSI may promise higher immediate returns, the working group’s multi-vendor proposal could stimulate a more dynamic and potentially more sustainable sports wagering ecosystem.

This juncture calls for a nuanced decision by the Delaware legislature, one that weighs immediate financial gains against long-term market health and consumer choice. As Delaware edges closer to launching online sports betting, possibly in early winter, the decision made will set a precedent for how the state navigates the complex interplay of economic interests and regulatory frameworks in the digital age.