Delaware: Legislative task force issues report favoring expansion of online sports betting

A Delaware legislative task force has published a report this month endorsing the implementation of competitive online sports betting in the state. Delaware, the first state to legalize retail sports betting after a federal ban on the practice was lifted in 2018, now looks to online wagering to keep momentum.

Since its retail launch, sports betting has been lucrative for Delaware, generating $62.6 million in tax revenue. However, the absence of legislation for online sports betting means the state is losing out on additional revenue, something that was particularly noticeable during the pandemic, leading to a decline in tax revenue as neighboring states with online betting options flourished.

In response, the Delaware House formed a task force to study the legalization of online sports betting. The House Internet Sports Lottery Legislative Working Group examined various online betting models adopted by neighboring states, such as Maryland, which allows up to 60 operators to directly license with the state; and Pennsylvania and New Jersey, which require partnerships between online operators and physical establishments.

The group's report did not specify a particular model for Delaware but highlighted an interest in protecting existing racetracks, suggesting a potential partnership with them. It also emphasized the economic importance of competition among operators.

Eilers & Krejcik estimates that Delaware could generate an additional $30.7 million in tax revenue over the next five years with online sports betting and over $9 million annually thereafter. The conclusion is that with an appropriate tax and licensing structure, Delaware could significantly increase its revenue from sports betting.

"From our review and our perspective, we think that having more is better for lotteries, because it creates more competition, it ensures that everyone has a good platform, and it allows more options for the public to choose what they want to do," stated Wiliam Bush, State Representative and member of the legislative group.

To make this a reality, the state will have to face challenges, including reviewing its recent agreement with Rush Street Interactive, Delaware's exclusive online gaming partner.