Sports Betting is Booming in the First State

Rob Kalesse

Rob Kalesse

, Uncategorized

Everyone from legislators to bettors are happy with the outcome—and the income

The start of the NFL season is more than a month away, but Las Vegas has already posted the odds for Week 1. (If you’re wondering, the Ravens are a 4-point dog, while the Eagles are a 1.5-point favorite.) While most gamblers across the country will be checking those odds and laying their bets through illegal bookmakers or via online sites like Bovada.lv and SportsBetting.ag, Delawareans don’t have to resort to those sources. Thanks to 2009 legislation allowing NFL parlay betting at the state’s three racetrack-casinos, residents of the First State have the luxury of betting on a minimum of three outcomes every week of the NFL season.

Three years after that legislation, House Bill No. 333 made it even easier for Delaware pro football fans to make weekly wagers. The bill, also known as the Delaware Gaming Competitiveness Act, allowed brick-and-mortar venues like bars, restaurants and convenience stores to offer NFL parlay betting.

Since then, sports gambling has been booming. The number of locations offering parlay betting has increased with each passing season, and now there are more than 80 locations around the state that offer this service, and gamblers flock to local pubs and bodegas on Sunday mornings. Outside of Las Vegas, Delaware is the only location that has implemented a successful sports wagering system, and everyone from legislators to bettors are happy with the outcome.

Sports betting ticket at Delaware Park. (Photo courtesy of Delaware Park)

Sports betting ticket at Delaware Park.
(Photo courtesy of Delaware Park)

Bringing Parlay Wagering to the People

John J. Viola was at the helm of the State Gaming Committee in 2012 when he proposed House Bill 333. Now the Majority House Whip, Viola says sports betting has been a success in Delaware, but not to the extent officials first imagined in 2009.

“The original goal was to allow straight wagering on all sports,” Viola says. “But a Third Circuit Federal Court decision ruled against us, so we had to accept parlay betting—on NFL games only—as a consolation prize of sorts. That being said, I think that, to the best that the courts allowed us, yes, the program has been a success.”

Prior to the court ruling, Gov. Jack Markell hoped to infuse more than $50 million into Delaware’s recession-riddled economy in 2009, when the state’s budget was forecast to come up some $800 million short. However, after the 2009-2010 NFL season, wherein only parlay betting was allowed, the state recouped only $1.6 million.

Viola saw the only way to increase betting traffic and revenue for the state was to offer parlay betting at neighborhood bars and convenience stores to make it easier than having to drive to Delaware Park, Dover Downs or Harrington Raceway.

“With all the online options, albeit illegal options, and local bookmakers who work under the table, we had to make it more convenient for folks to get up on a Sunday and go lay down bets near their homes instead of driving 10, 15, sometimes 30 minutes to place a bet,” Viola says.

Once the Delaware Gaming Competitiveness Act passed, allowing NFL parlay betting at 31 retailers, the state began to see a jump in sales, though not in revenue, at first. For the 2012-2013 NFL season, the “handle,” or sales of NFL bets, jumped to $25.4 million, up $7.5 million from the prior year.

The state’s share remained at $2.2 million, due mostly to the fact that the “liability,” or winnings paid out in 2012-2013, also jumped nearly $7.5 million, from $12.8 million in 2011-2012 to $20.2 million in 2012-2013, according to Delaware Secretary of Finance Tom Cook.

“Although the state’s share wasn’t through the roof that first season of NFL parlay betting at brick-and-mortar venues, we knew we were onto something,” Cook says. “People have so many reasons to stay at home or close to home, with all the TV packages and the comfort of their own couch or local tavern. Making the ability to purchase a parlay ticket at a convenience store and return to their homes makes a lot more sense.”

In the seasons to follow, the number of statewide retailers increased to 69 in 2013 and 83 in 2014, while sales have risen to $31.5 million and $37.9 million, and the state’s share has also risen to $5.5 million and $7.2 million, respectively.

Vernon Kirk is director of the Delaware Lottery, which oversees all aspects of NFL parlay betting, along with keno and lottery games. He calls the Delaware Competitiveness Gaming Act a “smashing success” that offers an interesting and fun product.

“Originally finding out we couldn’t offer straight wagering was a disappointment, but I think we’ve been able to make lemonade out of lemons,” Kirk says. “There was a notion that the racetrack-casinos would be hurt by the legislation, but part of the deal was that they would be allowed to offer iGaming, or interactive gaming, via online poker, blackjack and roulette.”

Kirk says that despite NFL parlay betting being offered at 83 locations for the 2014-2015 season, with early estimates indicating that number will eclipse 100 venues in 2015-2016, the brick-and-mortar spots have not “cannibalized the racetracks and casinos.”

From Casinos to Convenience Stores

The 2012 Delaware Gaming Competitiveness Act allowing NFL parlay betting at multiple venues across the state actually helped Delaware’s three racetrack-casinos. Bill Fasy, director of Delaware Park, explains that a licensing fee was lifted, making it more feasible to see a return on parlay betting.

“We originally had to pay a $4 million licensing fee to offer parlay betting in 2009, and although we saw a good amount of traffic, it wasn’t enough to support that fee,” Fasy says. “The quid pro quo was that legislators lift the licensing fee in exchange for allowing retail outlets to offer parlay betting. I’m not saying we’re making a lot of money from parlay betting, but we’re certainly making more now than before 2012.”

Paul Ogden, owner and operator of the chain of Famous Taverns throughout New Castle County, was one of the first business owners to apply for licensing in 2012. Ogden, who owns eight taverns, says he even helped form a taproom owners association and made trips to Dover to lobby on behalf of the legislation.

“My thinking was that if residents in Wilmington wouldn’t get off their couch on Sundays to drive to Delaware Park, then the state and business owners were missing out on an opportunity to bring in extra revenue,” Ogden says. “This allows me to put butts in the seats on a Sunday morning and afternoon during football season, which is a time when my bar would be a lot less busy.”

Ogden says that his bars, including Famous Tim’s on Lovering Avenue in Wilmington, are at or near capacity from 11 a.m. to 1 p.m. on NFL Sundays, and that fans and bettors alike hang out for the 1 p.m. and 4 p.m. games to follow their wagers.

“This has been a giant win for me, because Sunday mornings and afternoons now are equivalent to Friday and Saturday nights,” Ogden says. “My business model is to be open from 5 p.m. to 1 a.m., seven days a week, but this offers me an eighth day of business.”

Sam Patel, owner of Convenient Store at 201 W. 9th St. in Wilmington, was one of the initial licensees in 2012. He says that as an existing lottery retailer, a simple update to his gaming software was all that was necessary to get him started on NFL parlay betting. Since then, it’s been an overall success and something he feels even ties the community together.

“I have bettors that come in here on Saturdays and Sundays, and they’ll engage with each other, and talk about their picks, or their fantasy teams, or different players,” Patel says.

“It’s a good, positive vibe that allows me to see an impact in revenue, and even brings in bettors from surrounding states.”

Patel says he has customers who drive from Maryland, New Jersey and Pennsylvania, and even one man who takes Amtrak from New York’s Penn Station once a week. The trickle-down effect, as Patel calls it, brings more revenue to Delaware, whether it’s via bridge tolls, restaurant sales, or gas sales while visitors are in the state on Sundays.

In terms of individual payouts for the retailers, each bar and convenience store is paid 5 percent of every bet made, and 1 percent of every dollar paid out. For example, Patel says, if he sells a $2, he makes 10 cents, and if that ticket hits for $599 or less, provided that customer returns to cash in at Patel’s store, he receives an additional $5 ticket from the Delaware Lottery. Anything over $599 must be cashed at a Delaware Lottery site, or at one of the state’s three racetrack-casinos.

Sports bettors at Delaware Park. (Photo courtesy of Delaware Park)

Sports bettors at Delaware Park. (Photo courtesy of Delaware Park)

“Icy Mike” Cashes In

Last year, the liability, or winnings, paid out by Delaware Lottery reached an all-time high for NFL parlay betting: $23.2 million. According to Cook, that’s an increase of nearly $3 million from 2013-2014.

While the evidence suggests the larger payout is simply a result of a larger amount of money bet, bettors like “Icy Mike,” who places his wagers primarily at Famous Taverns, doesn’t care. In their opinion, the numbers are a good sign for the casual bettor.

“For the most part, I do a majority of my big betting with a bookie,” Mike says. “But not everyone has that ability, or even wants to mess with a bookie. Having gambling, even though it’s only parlay betting, on the level, I think is a big draw to why the bars are packed on Sunday mornings.”

Mike says he typically bets between $25 and $100 on NFL parlay betting each week, and then heads to a local bar to watch the games. The most he’s won was $325 on a three-team, $50 parlay card, and he almost hit on a six-team, $25 parlay card for $1,000.

“It’s fun, really. That’s what it comes down to. You get up on a Sunday morning, check the odds online, see what the majority of the public is betting, and go make your picks,” Mike says. “Me and my friends will sit at a bar, watch the games, check our fantasy lineups, and make a day out of it. That’s gotta be a good thing in terms of revenue for the state, the Delaware Lottery, and the individual bar owners.”

Wilmington resident Brian Citino also finds himself at Famous Tim’s on most Sundays during the NFL season. While he doesn’t wager as much as Icy Mike, or have his own bookie, he enjoys throwing down $25 or $30 to make the games more exciting.

“I really started getting into it two seasons ago, because it helped to keep me more interested in the games,” Citino says. “I’m an Eagles fan, so if they have the 1 p.m. game, after that I’d kinda lose interest. Having a little action on games keeps me watching.”

Citino says his biggest win on parlay betting was around $300, and that while bettors can’t expect to win every weekend, the idea of the excitement while hanging out with friends on a Sunday afternoon is what keeps him coming back. If straight wagering were to one day be legalized, he says, it would be great for other sports.

“I’m a big hockey fan and a big NASCAR fan, so if it were legal to bet on those sports, I’d probably watch more games and races,” Citino says. “The downside of parlay betting is you have to hit on all three games, so if you bust on a 1 p.m. game, you’re usually done for the day. It’d be nice to have other options, like single-game straight wagering on the Sunday night or Monday night games.”

Speculation on whether or not federal law would ever change to allow straight wagering on the NFL, NCAA and Major League Baseball games ranges from tepid to ice cold. Delaware Park’s Fasy calls the idea “a pipe dream,” while Delaware Lottery’s Kirk is hopeful, but realizes there is a lot to overcome in the process.

“As more and more states look for ways to increase revenue, and the budget crunch is in the forefront of everyone’s minds, there will be a discussion for legalized straight wagering,” Kirk says. “There is the idea of overseeing fantasy leagues as well, because so much money is illegally exchanged in that arena as well, but you’re talking about a lot of wrangling to keep track of something that big.”

Kirk is confident, however, that if federal legislation were ever to be passed, allowing straight wagering, Delaware is well positioned. Having the gaming infrastructure in place and being on the cutting edge of things like NFL parlay betting and iGaming is what will set Delaware apart from competitors in the long run.

A bettor makes his picks at Delaware Park. (Photo courtesy of Delaware Park)

A bettor makes his picks at Delaware Park. (Photo courtesy of Delaware Park)

Is New Jersey the Next Player?

If approved, Garden State could pave the way for legalized straight wagering
While Delaware gamblers have the privilege of NFL parlay betting every weekend during football season, residents of neighboring states like Maryland, New Jersey and Pennsylvania do not. Instead, they must come to Delaware to make their legal wagers on Sundays.

This is good for tavern owners like Paul Ogden and convenience store owners like Sam Patel, because it gives them a distinct advantage over competitors in other states. The reason: Delaware, along with Oregon, Montana and Nevada, was grandfathered in before the 1992 passing of the Professional and Amateur Sports Protection Act.

As a result of hearings on Senate Bill 474, Congress determined that “sports gambling is a national problem. The harms it inflicts are felt beyond the borders of those states that sanction it.” Delaware was grandfathered in due to a brief attempt at legalized sports gambling in the mid-1970s.

Nevada is arguably the gambling capital of the country, allowing straight wagering and parlay betting on NFL, NBA, MLB, golf and NASCAR. Oregon halted sports betting in 2007, and Montana offers only a fantasy sports lottery, which does not include betting on actual games.

However, New Jersey has been attempting to legalize straight wagering since 2012, primarily to help the decaying casino industry in Atlantic City. Since table games have been legalized in Delaware, Maryland and Pennsylvania, several of AC’s big name casinos, like Showboat and Trump Plaza, have closed.

New Jersey has been mired in cases with the sports leagues and federal government since 2012, but the ruling in “NCAA, et al v. Governor of New Jersey, et al,” was expected soon. Those in the gaming industry in Delaware do not seem too concerned about a competitive edge for New Jersey if Gov. Chris Christie gets his way and can legalize straight wagering across the state.

In fact, some officials, like Delaware Lottery Director Vernon Kirk, even welcome it, saying that gamblers in Delaware should root for New Jersey, because a victory there would help get federal legislation changed.

“New Jersey is going for the whole ball of wax with their suit; it’s about straight wagering on all sports, and that’s what we started out wanting in 2009,” Kirk says. “The NBA is for it, as long as it’s regulated, but the NCAA and NFL are against. It would be a big step forward if New Jersey wins this suit.”

Delaware Park Director Bill Fasy believes New Jersey’s case would prompt those in Washington to either “legalize sports betting across the board, or kill it altogether” in states other than the four grandfathered in 1992.

Because New Jersey’s case is being presided over by a federal appeals court, there is no hard timeline relating to when a decision will be made. A decision was expected in June, but may not be ready until the 2015 NFL season has begun, according to reports.

So, what do you think? Please comment below.