In Delaware, significant legislative strides are being made to broaden the state’s online sports betting industry. Building off of recommendations from the Internet Sports Lottery, Legislative Working Group, the prospects of permitting multiple online sportsbook platforms are rapidly advancing in the General Assembly.

Sprawled atop the Dover International Speedway, BetRivers signage, as of April 2024, marks the company as Delaware Lottery’s exclusive sports betting and iGaming operator. Despite this, calls have begun to resonate within the state legislature to dissolve this digital monopoly.

House Bill 365, introduced by State Rep. Franklin Cooke (D-District 16) in collaboration with Rep. William Bush (D-District 29), forms the centerpiece of this disruption. The bill endeavors to discontinue the Delaware Lottery’s exclusive hold on online sports betting and instead endorses the authorization of a maximum of five additional sportsbook platforms.

Cooke projected that the bill would not only augment the state’s revenue but also maintain competitive ground for the Delaware Lottery office against neighboring states. Citing substantial consumer demand, Cooke pointed to Delawareans’ insistence on venturing into border states like Maryland, Pennsylvania, and New Jersey to use their preferred mobile apps.

In the fiscal landscape, the Delaware Lottery teamed up with Rush Street Interactive (RSI) last year following the departure of 888 Holdings, its previous partner. Backed by its parent company Rush Street Gaming, based in Chicago, RSI’s BetRivers app now holds the reins of iGaming and online state-sponsored sports betting. The company additionally manages retail sports betting at the state’s trio of brick-and-mortar casinos and other retail wagering places.

BetRivers’ takeover signaled a distinct upward surge in revenue, with some state officials and Rush arguing that introducing additional sports betting operators could inadvertently impute a decrease in the state’s net revenue.

Legal Vice President of RSI, Adam Marchuk, confidently forecasted that they would exceed current projections for the Delaware online sports betting market in the near future. He backed the single operator model, emphasizing that it guarantees increased revenue for the state.

Contrarily, lawmakers countering Cooke’s bill assert the state would suffer financial setbacks by harboring more operators. BetRivers, functioning on behalf of the lottery, is obligated to contribute approximately 58% of its gross revenue to the lottery. The main beneficiaries of this contribution are the General Fund and the horse racing industry. In contrast, Cooke’s bill proposes a preliminary licensing fee of $500K for a five-year license, taxing gross sportsbook win at a rate of 19.5%. Of this, 18% would go to the lottery, with the remaining 1.5% set aside for horse racing.

Cooke, however, maintains that expanding the online sports betting market would yield greater returns for the state. Some bettors may be deterred by BetRivers’ less renowned branding compared to industry giants like DraftKings, FanDuel, BetMGM, and Caesars Sportsbook. Nevertheless, the state’s fiscal officers estimate a potential $3 million annual drop in sports betting tax benefits with the legislature’s proposed changes.

Furthermore, should House Bill 365 pass, Rush Street may attempt to invalidate the state law in court. It is worth noting that Rush Street – the sole bidder for the lottery’s online gaming contract last year – is committed to a five-year deal, with the upfront payment for the iGaming and sports betting rights still undisclosed. This movement thus places the state on an intriguing precipice, holding the potential to reshape Delaware’s online sports betting landscape.