Delaware Lottery Director Helene Keeley has raised concerns that legislative moves to broaden the online sports betting market might violate the state’s iGaming agreement with Rush Street Interactive. Should Delaware enact a law to expand online sports betting, it could jeopardize the state’s burgeoning online casino sector.
The contract with Rush Street Interactive, signed last August, designates the company as the exclusive provider of online gaming products for the Delaware Lottery via its BetRivers app.
In a conversation with PlayUSA at the recent National Council of Legislators from Gaming States conference, Keeley emphasized that the contract primarily focuses on online casino operations, with sports betting included as an additional feature.
Expansion Talk Began Earlier This Year by Delaware Lawmakers
Earlier this year, Delaware lawmakers debated a bill aimed at expanding the state’s online sports betting market to include six more operators. Although HB365 stalled in the Appropriations Committee before the legislative session ended in June—largely due to opposition from the lottery—it may resurface for consideration next year.
“If I were BetRivers and the state passed this, I would say I want to look at our contract because it’s not feasible for us to operate like this,” Keeley told PlayUSA. “It’s such a drastic change to the way they’re operating now. They can sue us for breach of contract or they can come to us and say they want to renegotiate.”
Delaware is the second-smallest state by size. Keeley believes a single operator is appropriate.
Rush Street Interactive Always Planned to Expand
Before Rush Street Interactive took over Delaware’s online gambling operations, the state generated about $13 million annually in gross gaming revenue, with over 80% coming from online slots.
Rush Street Interactive, with a guaranteed minimum marketing budget, aimed to boost revenues through targeted campaigns for casino gamblers and sports bettors.
Rush Street Gaming’s Chief Financial Officer compared Delaware to other U.S. markets like New Jersey, Pennsylvania, Michigan, and West Virginia, and developed a positive outlook. He projected that, based on the adult population and income levels, Delaware’s market size could eventually be ten times larger, and that The First State should become profitable fairly quickly.
Delaware’s Other Expansion Challenge
Delaware’s Constitution and state laws require the lottery to maximize state revenue. Because of this, finance and lottery officials have been cautious about entering the mobile betting market, which usually brings in less revenue than in-person betting. In-person betting, especially parlays, generates more income for the state. Delaware’s smaller population compared to neighboring states also limits its potential to drive wagers and revenue.
However, the growth of mobile sports betting in neighboring states and the increasing demand from Delaware residents have convinced state leaders to consider expanding into this market.
To successfully expand online sports betting, the legislature needs to welcome new operators while ensuring lottery revenues stay strong and the state’s online casino scene continues to thrive.
Something will have to give at some point, and typically, revenue always wins out.
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