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Delaware sports betting coming under new vendor

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Rush Street Interactive Delaware sports betting Bet Rivers Sugarhouse Casino

Rush Street Interactive, the owner of brands like Bet Rivers and Sugarhouse Casino, will take over online gambling for Delaware and launch the first mobile sportsbook. | DBT PHOTO BY JACOB OWENS

DOVER – After selecting a new online gambling vendor with significant sports betting experience, Delaware gamblers could wager on games before the end of the year, according to officials.

On Aug. 17, the state lottery announced that it has selected Chicago-based Rush Street Interactive (RSI), which operates brands like BetRivers, PlaySugarHouse and RushBet, for its next so-called igaming contract, succeeding prior vendor 888. 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, pending regulatory approvals.

The company currently offers mobile and online operations in 15 U.S. states, including in New Jersey and Pennsylvania. RSI is a subsidiary of Rush Street Gaming, which owns the Bet Rivers Casino Philadelphia near Penn’s Landing.

“This partnership is yet another significant milestone for RSI, as the confidence of a state-backed organization, such as the Delaware Lottery, further validates the trust that lottery officials have in our award-winning online platform and customer service,” said Richard Schwartz, CEO of RSI, in a statement announcing the bid award. “Building on our proven track record of success in the tri-state area of Delaware, Pennsylvania and New Jersey, where RSI was an early entrant in the first online market in the U.S., we are honored to collaborate with the Delaware Lottery team and the state’s three casinos to offer consumers who are geo-located in Delaware with safe, convenient, and innovative online gaming experiences.”

Helene Keeley, director of the Delaware Lottery, which oversees the state’s casinos and mobile betting options, confirmed that 888 and RSI were the only two bidders on the contract – although industry insiders reported that 888 dropped out from contention.

Notably, industry heavyweights FanDuel and DraftKings, who blanket airwaves with ads during major sporting events, did not submit bids on the Delaware contract.

The history

Delaware made history as the first state outside of Nevada to offer single-game sports wagering after the fall of the Professional & Amateur Sports Protection Act (PAPSA) in a 2018 Supreme Court ruling. It was able to make that history because for nearly a decade it had offered parlay bets on the NFL due to a grandfathering under PAPSA.

The Delaware Lottery, which regulates the state’s casinos, set up sportsbooks at the Delaware Park, Dover Downs and Harrington Raceway casinos, drawing bettors from around the region to make their first legal wagers.

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.

Just weeks after Delaware took the first single-game bet, New Jersey did the same and before the end of 2018, had launched online sportsbooks. In 2019, Pennsylvania followed suit on its own and in November 2022, Maryland essentially boxed in Delaware by launching its offering.

Today, it’s common for Delaware bettors who live near state borders to drive across the line to place bets from their phone – but that may soon change.

The challenge

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.

The growth of mobile sports betting in neighboring states, and the demand from Delawareans to offer the increasingly common option, helped convince state leaders to make the leap though.

Notably, state legislators expressed concern with the request for proposals issued by the state lottery regarding sports betting and created a House Working Group to examine whether to change the state’s approach. The finance department agreed to delay sports betting to consider any report issued by the Working Group, but it finished the 2023 legislative session without issuing one.

“It didn’t happen, so we made the executive decision to include sports in with the igaming contract. We feel comfortable with that decision,” Keeley said, noting that the lottery would follow any future changes approved by the legislature. “We felt that the demand from Delawareans was that they wanted an option for a mobile sports app, and not that it was a particular app.”

What to expect

RSI is expected to officially take over as the igaming vendor for Delaware late this year, offering online table games that feature the branding of the state’s three casinos – Delaware Park, Bally’s Dover and Harrington Casino – as well as a sportsbook, Keeley told Delaware Business Times.

The timing of the sportsbook launch means that football fans won’t be able to place bets on NFL and NCAA games for most of their seasons but may be live in time for major events like the College Football Playoffs and Super Bowl.

RSI already offers sportsbooks in four states, including Pennsylvania, under its brand names BetRivers and PlaySugarHouse. Both are managed by Kambi, a major digital platform that operates in 23 states.

With 888’s contract expiring in October, the state lottery is negotiating a short-term extension to bridge the gap between vendors, although the possibility exists that online table games may go dark for a few weeks if an agreement can’t be reached, Keeley said.

Notably, RSI does not currently have an online poker product, but is rapidly nearing a launch for one. Delaware is part of a multi-state compact with Nevada, New Jersey and Michigan to expand online poker tables, and Keeley said RSI would operate under the same framework once its offering was live.

She hopes that the new platform incorporates one of the most-requested options for the card game: live dealers.

“What we’ve heard and the feedback we’ve gotten from surveying poker players across the country is that the live dealer option is something that the players actually want,” she said, noting that Pennsylvania and New Jersey have it. “For real poker players, that’s what they want instead of it being like a video game.”

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