Home » Delaware looks to allow multiple sports betting apps, questions of revenue loss and lawsuits ensue

Delaware looks to allow multiple sports betting apps, questions of revenue loss and lawsuits ensue

State Rep. Frank Cooke (D-New Castle) introduces legislation that would allow multiple sports betting vendors to operate in Delaware as opposed to its current model — a contract solely with the BetRivers app.

That contract was made by the Delaware Lottery Office in August 2023, but Cooke explains the contract was signed before the Internet Sports Lottery Legislative Working Group was able to deliver its final report.

The working group ended up recommending the state allow up to six mobile sports betting operators, and Cooke’s legislation looks to codify that recommendation.

“This legislation will produce revenue for the state and to assure that Delaware state’s lottery office remains competitive with our neighboring states,” Cooke said. “There is substantial consumer demand for multiple operators. Delaware residents are still driving across the border into Maryland, Pennsylvania and New Jersey to access their favorite mobile apps.”

Although the bill’s sponsor and advocates argue a competitive sports market will ultimately be more profitable for the state, the current fiscal note estimates the state will lose approximately $3 million in revenue annually.

The bill would require operators to provide the state with 18% of their revenue, while BetRivers is estimated to currently provide the state around 40% of revenues that go into the General Fund, but the fiscal note does not factor in one-time revenue from the $500,000 license fee each vendor would be required to pay for a 5-year license.

Adam Marchuk of Rush Street Interactive — BetRiver’s parent company — argues the app has only been operational for almost five months, and the sole contract remains the most profitable option for Delaware.

“I’ve heard some criticisms of our performance, but we are on pace to meet and exceed all projections for the Delaware online sports betting market this year and for years to come,” Marchuk said. “If the market is the same size, the state unquestionably makes more revenue — generates more revenue — under the single operator model, as reflected in the fiscal note.”

Marchuk explains the state is keeping roughly 58% of gross gaming revenue under BetRivers, which is then distributed to the General Fund, to the horse racing industry and problem gaming support, which he says is unprecedented in the U.S.

But supporters of the bill argue there is a large untapped sports betting market and Delaware is losing revenue because of lack of brand value with BetRivers.

“In the month of March alone, there were 600,000 attempts to log into the FanDuel app in the state of Delaware. These are Delaware residents, folks commuting through the state and individuals staying in the state,” FanDuel representative Mike Ventre explained.

House Speaker Valerie Longhurst (D-Bear) also argued the projected fiscal loss isn’t correct and it should be reworked.

“I just have a hard time believing that we would be losing money. So if it’s just specifically language that’s in the bill that’s creating that fiscal note, I would like to know exactly– or not the fiscal note but the loss,” she said.

House Minority Leader Mike Ramone (R-Pike Creek South) raised concerns over legal challenges from Rush Street Interactive if the bill were to go through, considering the state has already contractually named them the sole internet gaming operator for Delaware.

“The way everybody loses is when we end up in court,” Ramone said. “I’m just stating, if I were the owner and this [bill] went through, in any format, without my involvement or cooperation — [the state] gets sued, not [the other vendors],” he said.

Representatives from Bet MGM and DraftKings spoke in favor of the bill, but Delaware Acting Secretary of Finance Rebecca Goldsmith and representatives from the state’s horse racing industry testified against it.

The bill was ultimately released from the House Administration Committee with all members signing to release it under the assumption the vendors would work on further negotiations before it hits the House floor.