Legislators file bill that would open door to Draft Kings and other sports betting apps

Lawmakers filed new legislation that would provide Delawareans with more options for sports betting through their mobile devices.

House Bill 365, sponsored by Reps. Frank Cooke, D-south Wilmington and  William Bush, D-Dover would allow Delaware to join neighboring Maryland, New Jersey, and Pennsylvania in offering more than one vendor. One Republican, Rep. Michael Smith, R-Pike Creek/Newark, is a co-sponsor.

Only Rush Street Interactive, operating under the BetRivers brand, is available online through the state’s three casinos. Delaware residents can use apps from MGM, Caesars, Draft Kings, and others if they are physically present in nearby states. A sizable percentage of Delaware’s population lives within a short drive of those states.

Sports betting has been legal in Delaware, but until recently, bets are to be placed at the casino. The Delaware Lottery awarded a back-end gaming services contract to Rush Street, which rolled out an app late last year that also offers slots and other casino games.

“It’s important that Delaware remains competitive and responsive to the preferences of its residents,” said Rep. William Bush. “By providing Delawareans with a larger mobile sports wagering market, similar to those thriving in neighboring states, we can level the playing field and bring in a new source of revenue for our state.”

The introduction of HB 365 follows work by the  Internet Sports Lottery Legislative Working Group, a bipartisan panel.

“Regardless of whether we’re talking about consumer products or sportsbooks, the consumer benefits from healthy competition in the marketplace,” said Sen. Spiros Mantzavinos, D-Newport, the Senate prime sponsor of HB 365 and chair of the Senate Banking, Business, Insurance & Technology Committee. “By creating a regulatory structure that allows our casinos to partner with multiple sportsbooks, we can better ensure legal gaming sites are providing consumers with the best value.”

According to Cooke, licensed online sports lottery operators are required to pay a $500,000 fee for an initial 5-year license to offer Internet sports lottery games in Delaware, and operators must return proceeds from their operations at a rate of 18% of the operator’s monthly adjusted gross sports lottery receipts. Licensed operators will also contribute 1.5% of their monthly adjusted gross sports lottery receipts to purses for allocation under the direction of the Delaware Thoroughbred Racing Commission or the Delaware Harness Racing Commission.

Some have wondered whether other vendors might not be willing to pay the upfront cost and rate of proceeds, given the state’s small population.

There is also concern nationwide about app-based gaming, leading to growth in the number of problem gamblers. The apps are heavily advertised with sports leagues also entering into relationships with vendors.

Licensing fees collected from operators will be allocated to the general fund. Proceeds returned to the state by Internet sports lottery are allocated first to the Lottery Office’s costs and administrative expenses.

The bill has been assigned to the House Administration Committee for consideration.