Sports Betting: A $50 Million Reality

Lawmakers Give Table Games Green Light

A hard-fought battle in the Legislature ended when Gov. Jack Markell signed a measure this week that expands gambling in Delaware. The bill allows sports betting in Delaware and is expected to bring an estimated $50 million to state coffers its first year. It also tentatively approves table games, which could be operating in 75 days, after a three-member committee reports to the General Assembly with a blueprint for regulating the games.

In the end, lawmakers toed the line by approving the governor’s proposal, aimed at balancing the state budget. The Senate fast-tracked the bill when members passed it with little debate by a 17-2 vote.

Two senators with ties to the existing racino industry abstained from the Tuesday, May 12 vote.

“I am very pleased that the Senate acted so quickly to pass the sports lottery legislation, and I very much appreciate the leadership from both sides of the aisle. In particular, I want to thank Sen. Anthony Deluca as the lead Senate sponsor and the leadership in the House of Representatives who came together to get us closer to meeting our budget challenges,”
~ Gov. Jack Markell

House Substitute 1 for House Bill 100 reauthorizes sports betting at the state’s three existing casinos. Delaware is the only state east of the Mississippi to allow sports betting, although lawmakers in New Jersey are considering challenging the federal law that limits sports betting to four states. In a separate move to allow gambling, the Maryland General Assembly is also eyeing adding slot machines to its existing racinos, including one at nearby Ocean Downs.

With one more vote, Delaware will implement blackjack and roulette, after the three-member committee presents rules and regulations establishing table games.

“The way it’s worded, we will meet again in 75 days and take a vote about how to do this and approve the split. It’ll take one more vote to approve, but the bill itself indicates General Assembly’s intent. It allows the industry to understand we’re moving toward table games,”
~ House Majority Leader Pete Schwartzkopf

While the committee must present its report in 75 days, or by the end of July, Legislative session ends June 30.

Schwartzkopf said the governor will most likely not call a special session because of costs, which could push a second vote back to January. After the Legislature recesses for summer, the Senate will meet for one day in September to approve special appointments, so the House could be reconvened at that time.

The substitute measure also calls for a second nine-member committee to study feasibility and profitability of allowing new gambling venues in Delaware. The report is due Oct. 15.

The committee will also report on altering the state share of casino revenue of table games.

The recently passed substitute measure increased the state share by 6.5 percentage points. For Harrington Raceway and Casino, if total revenue falls below $107 million, the state share will be 5.5 percentage points. The measure also calls for collecting a yearly $4 million licensing fee from the state’s three casinos.

Schwartzkopf said the bill passed with scant debate in the Senate because everyone is on the same page in Dover. He said members of both chambers understand how severe the shortfall is for next year’s budget.

“We’re not in a vacuum up there. Some senators sat in on discussions in the House. They had a whole two weeks to know what’s going on,” he said.

“It was a long, hard battle. We got it done, though,” he said.
The state budget shortfall is $780 million, although one-time-only federal stimulus funds will reduce the deficit by $155 million.

The Delaware Economic & Financial Advisory Council in April increased shortfalls by another $30 million. On Monday, May 18, the council will release a report which includes personal income tax revenue. Many legislators say the May report is one of the most important revenue predictors.

Schwartzkopf said lawmakers will next look at increasing personal income taxes from 5.95 percent to 6.95 percent for Delaware taxpayers who make $60,000 or more.

Story By Kevin Spence | Cape Gazette