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BetRivers' Exclusive Rights to the Delaware iGaming Market is in Jeopardy

April 18, 2024

For quite a few years, Rush Street Interactive has held the exclusive right to offer iGaming services in the state of Delaware. They have been exercising that right under the highly popular BetRivers sportsbook and online casino brand. While that exclusive right was memorialized by online gambling legislation, it's new online gambling legislation that is serving as a threat to the online/mobile operator's reign in Delaware.

About HB365

The legislation that would put BetRivers' reign in jeopardy is HB365. The bill calls for the issuance of up to five (5) more iGaming licenses for sports betting only by the year 2028. That's the year that BetRivers' agreement with the state will be expiring. To be clear, BetRivers would retain the exclusive right to offer online/mobile casino betting services.

The legislature's interest in expanding sports betting access seems to center on the thought that a more diverse market might bring more online sports bettors into the fold. That would likely result in higher sports betting revenue, which would translate to more tax revenue for the state.

The desire for more tax revenue is unquestionable. According to the current online gambling legislation, sports betting-related revenue is being disbursed to the following causes:

  • Education

  • Public Health and social services

  • Public safety

  • Child, youth, and family services

  • Judicial and corrections operations

  • Natural resources and environmental control

It's important to note that only one other state has awarded exclusive sports betting rights to a single operator. That would be in Rhode Island where Bally's is the state's sole iGaming operator. This isn't surprising given that Bally's is headquartered in Rhode Island. There is no such local affiliation between Delaware and Rush Street Interactive (BetRivers), which is based in Chicago Illinois.

If this new bill were to pass, it would benefit the likes of top U.S. online/mobile sports betting operators like Caesars Sportsbook, DraftKings, and Fanduel. At the same time, BetRivers would be relegated to secondary status in Delaware. That's a big deal for Rush Street Interactive given how small the Delaware sports betting market is in terms of gross betting revenue and sports bettors.

Objections Comming From Rush Street and the DE Lottery Commission

As expected, management at Rush Street Interactive is not thrilled with the prospects of this new legislation. The company would be subject to the loss of a lot of sports betting revenue, which would offset any benefit the company might get from a lower tax rate.

Delaware Lottery Director Helene Keeley is on board with opposition to this bill for a very different reason. With the Lottery Commission charged with trying to increase state tax revenue, the proposed lower tax rates would have a negative impact on the state's coffers. They also oppose any more sports betting expansion, seeing it as competition for Delawarian discretionary gambling revenue.

In an interview with PlayUSA, Keeley has this to say about the new bill:

HB 365’s proposal to license multiple mobile sports gaming businesses to compete with ourselves would not ‘grow the pie,’ but instead, lead to smaller slices of pie — especially for state taxpayers.”

Let the games begin.

 


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