Delaware's Lottery Sports Betting Model Becomes Reference for US States

Delaware is one of the pioneers in regulated gambling in the US. For years, the state has offered a unique approach to sports betting. This model is based on a lottery system rather than a market with many commercial providers. This differs significantly from what is found in other US states or even in Germany. Players aged 21 or older are allowed to participate. The Delaware State Lottery oversees the entire system. Even statewide online sports betting has been available since August 2023, though strictly georestricted to the state of Delaware. The operator BetRivers provides the online platform for this. But how exactly does this work, and what lessons are other states learning from it? Let's take a closer look at the details.

Numbers and facts

Delaware has a long history in sports betting. It began with parlay-style lottery products in 2009. Following the landmark 2018 U.S. Supreme Court decision that repealed the Professional and Amateur Sports Protection Act (PASPA), Delaware launched single-game retail sports betting on June 5, 2018. Statewide online sports betting then arrived in August 2023. The Delaware State Lottery is consistently responsible for this, acting as both regulator and operator. For retail betting, established casino locations such as Delaware Park Casino & Racing, Bally’s Dover Casino Resort, and Harrington Raceway & Casino are available. Revenue from sports betting flows directly into state coffers. According to the National Council of Legislators from Gaming States (NCLGS), the average iGaming tax rate in the seven US states with legal online gambling is 19 percent. However, this is not directly comparable for Delaware, as it operates under a lottery allocation model.

Background

PASPA's repeal in 2018 by the U.S. Supreme Court was a turning point. It allowed each state to decide on the legalization of sports betting itself. Nicholas G. Colon, a veteran of the casino industry, described this as a "dynamic shift in the gambling world." Delaware promptly took advantage of this new freedom. The state is geographically small, which makes geolocation for online bets particularly challenging. Wagering is only permitted within Delaware's state borders. Collegiate teams within the state and college events held in Delaware are generally restricted. This is an important aspect of player protection. Gambling authorities place great emphasis on responsible gambling. Responsible Gaming Education Month (RGEM) in September annually highlights progress in this area. The American Gaming Association (AGA) coordinates educational campaigns and training. Caesars (then Harrah's) established the first RG program in 1989. Since the 2000s, player protection has been taken more seriously. Caesars, for example, implemented company-wide exclusion lists. Maryland State Senator Ronald Watson emphasized the importance of education in legalizing online gambling. He stated:

"We need to treat it like a campaign. The person who introduces (legislation) is just the quarterback. In this case, you need a whole team behind you." - Ronald Watson, Maryland State Senator

This shows that the legalization of gambling in the US is a complex political process. Many states are struggling with the introduction of iGaming. Only seven states have so far legalized online casinos, including Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia. The NCLGS is working on model legislation to support lawmakers in other states. It aims to cover topics such as revenue generation, player protection, advertising guidelines, and licensing.

Why it matters for German players

The sports betting model in Delaware is quite unique for German players. Here in Germany, under the State Treaty on Gambling 2021 (GlüStV 2021), the market is organized differently. In Germany, through the Joint Gambling Authority of the Länder (GGL), there is a whitelist of licensed providers. These providers obtain a license; unlike Delaware, the state itself is not the primary operator. German online casinos must adhere to strict rules. A deposit limit of 1,000 euros per month is mandatory for all players, regardless of the provider. Furthermore, there is a stake limit of one euro per spin for online slots. These restrictions serve player protection. The nationwide deposit limit is controlled via the central monitoring system LUGAS. This system prevents players from depositing higher amounts than the monthly limit allows at multiple providers simultaneously. While Delaware also has player protection measures, such as recommendations for deposit, wager, and time limits, and a regional helpline (1-888-850-8888), the centralized state control via the Delaware State Lottery is a fundamental difference from the German licensing model.

What it means for GGL-licensed casinos

For online casinos with a German GGL license, the Delaware case primarily highlights the existence of different regulatory approaches. While Delaware relies on a state-controlled lottery model, Germany follows a licensing model that permits private providers to operate under strict conditions. GGL casinos must comply with the GlüStV 2021, which mandates comprehensive player protection measures. These include not only the aforementioned limits but also strict advertising guidelines and the obligation to participate in the OASIS self-exclusion system. The GGL strictly monitors compliance with these regulations. A state-monopolized sports betting system like Delaware's would be hardly conceivable in Germany, as the GlüStV 2021 explicitly focuses on channeling the market through private, licensed providers. This aims to counteract the black market and ensure player protection. However, Delaware's experience shows that a state-controlled system can also be efficient in creating a regulated market and displacing illegal providers.