Inside Delaware’s Final Regulations for Online Gambling

On September 10th, the Delaware State Lottery issued their final Rules and Regulations for the Delaware Internet Lottery, which includes Internet lottery ticket sales, Internet video lotteries (slots) and Internet table games including poker.

These regulations highlight the very large difference between a state lottery system and the multi-casino system as in Nevada and New Jersey.

Review the full text of the final regulations here.

How Delaware online gambling will work

The Delaware Internet Lottery is essentially a single-provider system. The Internet gaming provider will be a joint venture of Scientific Games (the current live slots provider in Delaware) and 888 Holdings (including their 888 online poker platform).

Each of the three Delaware racinos – Delaware Park, Dover Downs and Harrington Raceway – will operate branded portals to the single gaming platform.

The State Lottery will take their usual cut of gaming revenues – 43.5% on slots and 34% on table games, including poker.

Player protections short on details

Unlike the strict regulatory regime for online poker in Nevada, the Delaware regulations provide little in detailed protections for players.

For the most part, the regulations specify how to apply for a license for the various stakeholders (operators, technology providers, service providers, and employees). Most other details are left to “internal control systems” (ICS), which are individually submitted and approved by the State Lottery for each operator.

The regulations require the operators to verify the age (at least 21) and location (at the time of play must be in Delaware or a jurisdiction with which Delaware has a compact) of players, but leave the details to the ICS.

Some other important points for players:

• Deposits can be by bank transfer or credit card; withdrawals by bank transfer or check; plus any additional methods approved by the Lottery, including account transfers from a live racino customer account.
• Players can have a separate player account through each operator, but will be prevented from using more than one account at a time.
• Transfers of money between accounts will not be allowed. Player-to-player transfers are also forbidden.
• Money left in inactive player accounts will go to the State, but there is no definition of what constitutes an inactive account, and no rules to protect players who let their account go dormant such as required advance notice of account suspension.
• The regulations do give extensive rules for resolving player disputes, including a system of appeal to the Lottery. Privacy protection for players is also covered by the regulations.

State will hold player funds

The regulations state that “the agency [the Delaware State Lottery] will maintain a separate bank account to hold funds deposited into registered player’s accounts.”

Monthly, the Lottery will transfer to the operators their proceeds (revenues from rake, fees, etc.) from the games.

The details of how this will work are sketchy in the regulations. At the same time, this means that the state government will be holding the player account funds, arguably giving better protection than player funds held by a casino or site provider, as in Nevada.

Problem gambling regulations leave much to be desired

The problem gaming options are the worst I have seen so far in the U.S.. Players will have only the option for full self-exclusion from all online gaming at once, for a period of one year, five years or lifetime. The regulations do not provide for any self-limit options, such as limits on deposits, wagers or stakes.

To get on the self-exclusion list, a player has to provide a signed document which attests “I am a problem gambler”, and provide a physical description and photo ID. To get off the list, a player must submit a request in writing after the end of the one-year or five-year period. These limited options seem more likely to discourage self-exclusion than to help prevent problems.

The next steps for online gambling in Delaware

The Delaware racinos began offering play-for-free online gaming and poker in July through the DoubleDown Casino app on Facebook, as an advance portal to the real-money gaming expected to launch in October. The regulations allow the play-for-free gaming without restrictions on age or location, but the games must offer the same randomness and odds as the real-money games.

The regulations will allow pooling of players under compacts between Delaware and other jurisdictions. However, since Delaware will have just the single-provider system, it seems logical to expect that only operators running on the 888 poker platform, such as WSOP.com, will have that opportunity.

Perhaps Delaware expects to expand their offerings in the future. The regulations are written to accommodate additional providers and operators.

There is little else in the Delaware regulations spelled out for the protection of players, such as standards to detect cheating and fraud, customer service requirements, site transparency, software security and game fairness.

A Lottery-run online gaming system seems to afford quick implementation and the security of state-protected funds, but also sacrifices the many other protections and competitive marketplace that make for a robust playing environment.