Delaware


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Update – June 29, 2012

Following a State Senate vote of 14-6 approving online gambling in Delaware, Gov. Jack Markell put his signature on HB 333 less than 24 hours later, allowing the First State to join Nevada as the only states to have authorized online poker.

In addition to Internet poker and casino games, the Gaming Competitiveness Act of 2012 allows over 20 non-casino locations to offer NFL betting, and keno will be available in more than 100 land-based sites.

Early 2013 is the projected date of launching online gambling sites, with industry rumors circulating that West Virginia and Rhode Island may be discussing a partnership deal with Delaware to increase the pool of online poker players.

The First State Could Become One Of The First States To Pass Online Gambling Laws

The State of Delaware got its moniker, “The First State,” for being the first of the thirteen original colonies to ratify the U.S. Constitution and become a state. Fast-forward to 2012 and Delaware may be one of the first states to legalize online gambling.

Delaware is already home to horse-racing, a state lottery, and three land-based casinos, so the state legislature is comfortable with the revenue it sees from the legalized forms of gambling that already exist. In 2011, Delaware received almost $250 million in revenue from its three racetrack-casinos, Delaware Park, Dover Downs, and Harrington Raceway. And with lawmakers apparently set to contemplate the proposal of the Gaming Competitiveness Act of 2012, which would legalize certain forms of online gaming, Delaware could expect another $7 million, possibly more.

The Gaming Competitiveness Act of 2012 would permit the sale of Delaware State Lottery games such as Powerball, Pick Three, the ever-popular scratch-offs, and online casino-style games. The proposal also would allow twenty extra sports lottery locations, and the state’s three casinos would be authorized to add Keno to their list of available games.[1]

The administration of Delaware Gov. Jack Markell introduced the Gaming Competiveness Act of 2012 on the same day that legislators in Delaware’s neighboring state, Maryland, gave the green light for the opening of a sixth casino. Maryland’s authorization of the additional casino apparently has Delaware legislators in fear of losing in-state gamblers to a brand-new casino just across the border. Ed Sutor, President and CEO of Dover Downs, as well as chairman of the Video Lottery Advisory Council, expressed concern about the proximity of the new casino, which will be located in Arundel Mills, Maryland, and the effect it will have on the revenue it will take away from the state of Delaware. “Fifty percent of our business comes from Maryland and forty-five percent of our business lives within fifty miles of Arundel Mills. That is going to be a significant hit to us.” [2]

As of late April, the Delaware Legislature has not yet taken up the Gaming Competitiveness Act, so Delawareans will have to wait and see when the proposal will be considered by legislators. Sutor had high hopes of knowing more about the Act’s possible approval when the Video Lottery Advisory Council meets in July. Vernon Kirk, director of the Delaware State Lottery, shares Sutor’s optimism but admits that things are still up in the air until legislators make a move. “We can plan internally, but there will be nothing concrete until the bill is passed and we know the (Maryland casino) impact.”

The bill, which would have to pass both the House and the Senate before it makes it to Gov. Markell for approval, has a fairly good chance of passing because of the Delaware legislature’s reputation of cooperation. “Delaware moves quickly, and we tend not to fight all that much,” said Brian Selander, Gov. Markell’s Chief Strategy Officer. If the Gaming Competitiveness Act of 2012 were approved soon, Delaware could be one of the first states to offer online gambling on an intrastate basis. However, they are trailing Nevada, whose legislators already passed regulations on online poker in December, 2011, and are poised to be first in allowing residents to play poker online.[3] The Silver State is currently conducting software testing of approved sites by independent labs. After that, the state will undertake the chore of issuing the coveted licenses, which may occur as soon as this summer. The Nevada online poker sites are optimistically scheduled to be operational by fall of 2012.

Around the Track and Back–Gambling in Delaware Began with Horse Racing

Gambling in Delaware reaches all the way back to when Delaware was still a colony. The first horse racetrack was built in Newark, Delaware, in 1760, twenty-seven years before Delaware became a state. And while public betting was forbidden, it didn’t stop the Colonists from betting amongst themselves on which horses would win, place or show. Horse-racing in Delaware became popular, but by World War I, opponents did what they could to curtail the pastime. But by the early 1930s, when every state was reeling from the Great Depression, even gambling opponents recognized that horse-racing could generate much-needed revenue. In 1933, the Delaware Racing Commission was created. From there, horse-racing in Delaware was off and running.

The Delaware Steeplechase and Race Association was formed in 1936. The group teamed with the Delaware Racing Commission to build a racetrack and facilities to breed and train racehorses. The track ultimately became Delaware Park in Wilmington, which opened in 1937 and quickly became a high-profile tourist attraction. The track closed in 1943 because of World War II, but reopened the next year to earn the state more than $23 million. Delaware Park thrived until 1982, when competition and a declining interest in horse-racing forced the park to close. But it came back with a vengeance in 1985 under a new owner. Ten years, later, the Delaware General Assembly passed the Horseracing Redevelopment Act, which also included allowing slot machines at racing venues. Thus, the casino portion of Delaware Park was born. In 2009, the Delaware legislature granted Delaware Park the right to allow wagering on sporting events, and in June 2010, Delaware Park opened its table gaming to the public. Delaware Park, of course, is still in operation, with horse-racing ongoing from April 22 to Nov. 19 every year. [4]

Dover Downs has been racing horses since 1969 and later also began to host NASCAR racing. In 1995, it was the first NASCAR superspeedway to pave its racing surface concrete to make for better racing. Harrington Raceway has the honor of being the oldest harness racing venue still in operation, offering continuous racing for nearly 60 years. Following the passage of the Horseracing Redevelopment Act in 1996, both Dover Downs and Harrington followed Delaware Park’s lead and added video lottery machines.[5]

Besides horse-racing, slots, and table games, Delaware residents have almost always had bingo and a state lottery. Bingo was legalized in 1957, and the lottery has been around in some form since Delaware was still a colony. The Delaware Lottery as it is known today was established in 1974.[6]

Legal Online Gambling in Delaware Only a Matter of Time

With revenue losses expected in its own racetrack-casinos to new land-based casinos of bordering states, Delaware lawmakers are intent on obtaining revenue via other means. Legalizing online gambling through the Gaming Competitiveness Act of 2012 will go a long way in accomplishing that. Although the Act does not put online poker in the forefront of the online games that will be available to Delaware residents upon passage, there is a strong likelihood that Delaware will jump on the online poker bandwagon once Nevada and perhaps another state or two can show successful revenue gains from that realm of gambling. However, whether its online casino-style games or poker, you can bet that legalized online gambling will come to the First State before many of the other states have passed such legislation. It’s only a matter of time.

Citations

[1] Delawares plans to expand gaming in the state by Newsworks.org
[2] Delaware fears loss of business to Maryland casinos by Delaware Newszap
[3] Nevada pass online gaming legislation by the Wall Street Journal
[4] Delaware Park history – Delpark.com
[5] A history of gambling in the state of Delaware by DelawareCasinos.com
[6] The history of the Delaware State lottery – Delottery.com