Delaware Doesn’t Offer Mobile Sports Betting (Yet) For A Specific Reason

Official sports betting numbers from Delaware have been released, and the figures are strong but pale in comparison to New Jersey.
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Delaware sports bettors at the state’s three racinos gambled a yearly-high $13.3 mm in December, but the state settled for a relatively-low “net proceeds” figure of $1.6 mm, per figures released by the Delaware Lottery on Tuesday.

As usual, the state fared better at the 102 retailers permitted to offer only multi-game “parlay bets” on NFL games. Last month, gamblers risked $7.2 mm, and after expenses, the state held onto $1.4 mm of it.

The December numbers provide an opportunity to review the calendar-year totals as well.

For 2019, sports bettors gambled $102.6 mm at those racinos, with the state’s take coming to $12.5 mm. And once again, the “hold” was even higher on the parlays: $7.1 mm out of the $29.9 mm wagered.

Like many states, Delaware does not offer mobile sports betting — in spite of nearby New Jersey’s numbers on such devices.

For instance, in November New Jersey’s racetrack and Atlantic City casino sportsbooks accepted $75.9 mm in bets — more than half of what was bet legally in Delaware all year.

But the more than a dozen legal mobile sportsbooks took a remarkable $486.8 mm in additional wagers. That helped New Jersey keep $32.9 mm that month, compared to the $19.6 mm that Delaware collected in the entire year.

Of course, Delaware’s population is just under 1 mm, while New Jersey has 10 times as many residents. Also, New Jersey is getting a “bonus” of sports bets estimated at 10% to 20% from traveling New Yorkers near the lower Hudson River whose nearest legal sports betting option in their state is a casino in the Catskills Mountains up to 100 miles away.

The hesitation on mobile sports betting

The Delaware Lottery is not barred from offering mobile wagers — it just hasn’t yet elected to do so.

One reason offered has been that the cost of infrastructure might make it cost-ineffective to implement, although New Jersey’s massive numbers may cut into that argument.

But there is another rationale: The state’s cut of the parlay bets at those retailers such as Buffalo Wild Wings is a much more appealing margin than traditional bets, where the sportsbook tends to retain only about 5% of the amount wagered (and the lottery collects just under half of that figure).

Add mobile wagering to the mix, and that will undoubtedly cut into the volume of parlay bets, where the profit margins for the sportsbook and state coffers alike are far higher.

“We are certainly studying this very carefully,” Delaware Lottery Director Vernon Kirk told USBets.com. “It’s a very complicated issue in Delaware with our current legislated sports betting structure that includes the state’s three casinos and our retailer network, all operated by the Lottery.

“There are also substantial additional costs associated with mobile that we are not currently incurring (i.e. geolocation, ID verification, payment vendors & processors, 24/7 customer support, fraud monitoring, mobile platform fees, etc.).

“On the revenue side, it’s just as unclear regarding the impact that mobile will have on sports betting in Delaware. We have to balance mobile versus our very large parlay card retailer handle. Will we do better with more volume (a finite number considering the size of DE), but a lower hold if parlay card participation by the retailer network declines precipitously (a strong possibility)?

“However, having said all of that, in order to keep pace with the competition mobile sports betting of some form or another in the future is inevitable, we just don’t have a timetable at the moment.”

Parlays still a payday

“Our parlay card business has been exceptional,” he said. “We attribute that to two primary factors. First, because Delaware had three-game (minimum) NFL parlay wagering since 2009, our customers were very familiar with that type of wagering and really enjoyed it. Secondly, with the restriction to NFL games only removed, we added college football to our cards. That gave bettors a lot more games to select from and retailers the opportunity to sell cards for Saturday as well as Sunday.

“We continued our three-game minimum for parlay card wagering even after we launched full-scale sports betting, and our football parlay card hold has been nothing short of phenomenal! College and pro football card handle in 2018 was $38.2 mm with a hold of $15.9 mm (+41.6%) and in 2019 the handle was $32.8 mm with a hold of $15.5 mm (+47.3%).”

Increased competition last year from neighboring states — especially Pennsylvania — is noticeable in the numbers. In the seven months of legal wagering in 2018 after the U.S. Supreme Court widened the door for sports betting, the handle in Delaware was $115.3 mm.

With a full 12 months of 2019, that figure barely increased — to $132.1 mm. The declines in monthly handle were felt both at retailers and at the racinos.

“We anticipated the handle would be down this year, given the regional competition having a full year to catch-up to Delaware being the first state to launch full-scale sports betting, post the Supreme Court decision,” Kirk said. “The decline in casino football betting was -27.7% ($10.2 mm). The biggest impact was NJ, but by this past year PA had also moved into the market.”

Kirk had a detailed breakdown of 2019 betting by sport:

  • Parlay cards: $32.8 mm
  • Pro football : $18.8 mm
  • Baseball: $10.0 mm
  • College football: $9.4 mm
  • Pro basketball: $4.8 mm
  • College basketball: $2.1 mm
  • Hockey: $1.5 mm

Online casino gaming in Delaware

Delaware also has been an early mover in online casino gaming, where it mirrored the sports betting rollout by being the first state in the country outside of Nevada to offer it — in both cases, just days ahead of New Jersey.

The online casino options became available to adults in Delaware in late 2013.

Video lottery play has been steady throughout 2019, with between $3 mm and $5 mm risked each month. The state’s share has been relatively modest, typically being $300k to $400k.

Table game action has been more volatile, dipping as low as under $4 mm yet at times climbing above $10 mm. The state has tended to collect just $40k to $80k per month on these games — except for September, with a remarkable $171k in state winnings on an ordinary $7.9 mm in bets.

Online poker drove much of the effort to legalize all forms of casino games online, but results have been tepid. The state’s poker rake and fees have brought in between $20k and $30k each month of 2019.

Photo credit: Shutterstock

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