Delaware casinos will start offering sports betting next week

As from next Tuesday, Delawareans will be able to make legal wagers on professional baseball, football, hockey, basketball, soccer, golf and auto racing, and the NBA finals, which were to begin Thursday night and could run through June 17 if the championship series goes to a seventh game.

"Obviously the key is going to be the football season because the bulk of betting in America is on football," state Finance Secretary Rick Geisenberger said Thursday. "We’ll learn a little bit in June and July, but we’ll learn a lot more in September."

Delaware was able to get a quick start because of prewritten sports betting legislation that was passed in 2009 and a pre-existing wagering system that offers multigame parlay bets on National Football League games.

By virtue of a failed sports lottery experiment in 1976, Delaware was one of only four states, along with Nevada, Montana and Oregon, that received grandfathered exemptions from the 1992 federal ban on sports gambling that was recently struck down by the Supreme Court.

In 2009, lawmakers authorized the state lottery office to promulgate regulations for betting on any professional or collegiate sporting event, except for games involving Delaware colleges or universities. A federal appeals court shot down the state’s plan, however. It said Delaware was restricted in its grandfathered status under the federal ban to offering multi-game parlay bets on National Football League games.

While the attempt to expand sports betting failed, the 2009 legislation and the state’s experience offering NFL parlay betting over the past several years meant the infrastructure for full-scale betting was already in place.

"We’ve had sport betting for nine years, so it’s not new to us," state lottery director Vernon Kirk said Thursday after officials completed live testing on the new system.

"We’re not surprised the software works because it’s been working fine," Kirk said. "We didn’t have to make any significant changes."

For the time being, bettors will have to make wagers in person at a casino, but officials are working on a mobile application that will eventually allow someone who is ”geolocated,” or physically present, in Delaware to place bets on a smartphone.

"We certainly think that’s the future of sports betting," said Kirk, adding that the launch of any mobile application is at least several months away.

Meanwhile, it’s unclear whether sports betting will pay off for Delaware.

The existing sports lottery has taken in about $46 million in wagers annually over the past two years, with an average net of about 25 percent. After the oddsmaker takes its cut, the state takes half the remainder, with about 40 percent going to the casinos. The state’s horse racing industry also gets a percentage. The state’s final profit amounted to about $2.2 million in fiscal 2017 and $9 million in fiscal 2018.

The same revenue-sharing scheme will be used for the new sports betting system, with the state, casinos and horse industry sharing what’s left over after the winners are paid and Scientific Games, the state’s primary sports betting contractor, takes its first cut of 15.6 percent of the remainder.

Geisenberger notes, however, that while the average net take on parlay football bets has been about 25 percent, the average win on head-to-head, single-game bets is about five or six percent. That means the state would need to see a sharp increase in wagering to match or exceed its current profit.

"You need a lot more gaming in order to generate the same amount of revenue," he said.