The Delaware Lottery has reached an agreement with a global online gaming company that will introduce online sports betting in Delaware for the first time and take over the state's existing virtual casino games.
Rush Street Interactive is replacing 888 Gaming, the only platform the state has used since the inception of online gambling or "igaming" in 2013. Delaware Lottery Director Helene Keeley said RSI was chosen by a selection committee of lottery staff and state officials for its commitment to responsible gaming, customer service and quality products.
RSI and 888 were the only companies that responded to the Lottery's request for bids.
RSI is expected to start operating in Delaware in "early winter," according to Keeley. The Lottery is negotiating an extension with 888 as their current agreement is due to expire at the end of October.
Notably, RSI will not offer online poker at launch. The company is currently developing a poker platform, but it is not yet operational. Keeley and RSI declined to provide an estimate for when it will launch.
As they are now, virtual casino games will be offered through the state's casinos: Delaware Park, Bally's Dover and Harrington Raceway and Casino. RSI will be working with each casino over the coming months to design new user interfaces. They will bear the casino's branding, not RSI's. All of the games and betting odds will be the same across each casino. Online sports betting will be included as its own "tab" in each of the casino's sites.
What's the status of online sports betting in Delaware
Lottery officials decided to implement online sports betting despite apprehension from a group of state lawmakers. Some of the lawmakers felt the lottery's proposed system was too restrictive and questioned why gambling giants like FanDuel and DraftKings weren't interested in bidding.
They formed a working group during the legislative session to provide recommendations on how to proceed with online sports betting. The Lottery, which originally wanted online sports betting live by the start of football season, agreed to pause implementation as the working group met. Keeley said the Lottery was supposed to receive a report with the working group's recommendations at the end of the session, but did not.
"Knowing that there is a high demand from our customers and their constituents, and not just the four [working group] legislators, but up and down the state, in consultation, we felt that it was time to award the igaming contract to include sports," Keeley said.
She added that there is nothing to stop the legislators from passing a law that alters the parameters of Delaware's sports betting and igaming systems.
Delaware is one of few states that makes casino games and sports betting the domain of the state lottery office. The Lottery, by state law, is required to operate those games "in a manner which produces the greatest income for the state."
For years, lottery officials resisted adding online sports betting to avoid cutting into the more profitable action placed on parlay cards available at retailers across the state. Parlays require several outcomes to come true for the bet to hit, making them more profitable for the state than individual game or prop bets registered at casinos or online.
Their position changed late last year when Maryland opened online sports betting, leaving Delaware as the last state in the region without an online option. They proposed a system with one sports betting provider that would operate through the state's casinos as the existing online games do.
Some lawmakers in the working group endorsed a competitive system in which the state would award contracts to multiple sports betting vendors that would market directly to consumers. Introducing competition, they argued, would be better for customers and make national names like FanDuel and DraftKings more likely to be interested in Delaware.
"People of a certain age demographic aren't raised to go to casinos, they're raised on everything mobile," Rep. Michael Smith said in a June working group meeting. "Right now, they're in the market, just not in the state of Delaware."
RSI's existing online sportsbooks include BetRivers and PlaySugarHouse. They are powered by Kambi, an online platform that operates in 23 states, the second-most of any supplier.
RSI was the first company to launch an online sportsbook in Pennsylvania. It runs online sportsbooks in Colorado, Indiana, Illinois, and Ontario, Canada.
Are poker and online casino games coming to Delaware?
Many of the other online casino games could remain the same. RSI can contract with the same game content vendors 888 used and/or introduce new options.
Not much is known about RSI's eventual poker platform, but Keeley is hopeful it will include live dealers.
"While we understand that poker is a popular product within the poker world when it comes down to products in Delaware, it's one that compared to the casino-type games is not as popular," Keeley said. "We think that the ability to have a live dealer is probably the strongest way to reenter the online poker environment."
RSI's website promises a modern, streamlined user experience with "dynamic avatars" to "bring a human element to online poker."
Delaware will likely enter a liquidity sharing agreement with other states that will allow for larger pots and a deeper player pool. In 2015, Delaware made an agreement with Nevada that was eventually expanded to include New Jersey and Michigan. A new or modified agreement has not been finalized, Keeley said.
The contract with RSI is for five years. It includes five one-year extensions. It's the same length as Delaware's first agreement with 888 in which Delaware maxed out on extensions.
RSI is in seven igaming markets, according to its website.
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