Delaware’s Role in the US iGaming Industry: Still to Be Determined

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The licensed online poker industry in the United States reminds me of the typical family dynamic: Nevada is the oldest child and gets the tons of attention whether deserved or not; New Jersey is the smart, athletic, good-looking sibling who has seemingly had all the breaks.

And then there is Delaware, which appears to be the redheaded stepchild of the US online poker industry.

But as every redheaded stepchild will tell you, they have their own talents to offer the world, and so does Delaware.

Nevada, New Jersey and Delaware

Nevada was the first state to launch legal online gambling in the US and had a six-month head start during which they were able to hog all the US iGaming headlines.

Delaware’s launch of its iGaming industry on November 8th caused a mere ripple in the force with its modest traffic numbers, even by the unimpressive standards set by Nevada. And Delaware was quickly drowned out by New Jersey’s launch just two weeks later.

So Delaware has been toiling away in relative anonymity for over a month now, while its older brother Nevada gets quite a bit of unnecessary attention, and its perfect sister New Jersey is looked upon as the greatest thing to happen to US online poker since PokerStars.

Despite all of this, I firmly believe that Delaware has an important role to play in the new online gambling market.

Delaware will likely be a lynchpin for interstate online poker

Delaware’s biggest contribution to the industry will likely be the role it plays in creating interstate online gaming markets.

Nobody is expecting Delaware to build a player pool with enough liquidity to survive on its own; the state simply doesn’t have the population to generate this type of player base.

Accordingly, Delaware has been very vocal about its intentions to partner with other states to form interstate iGaming compacts.

Because Delaware needs other states more than these states need Delaware it’s quite likely Delaware will take the short end of the stick just to get the ball rolling. So it wouldn’t surprise me at all if ten years down the road we are reminiscing about the significant role Delaware played in the US online poker industry in terms of sparking interstate cooperation.

State-run games

Delaware is also using a far different delivery system than Nevada or New Jersey, as the state’s three “Racinos” offer online games on their branded websites that are provided by the partnership of Scientific Games and 888 Holdings, with the state lottery controlling everything.

In Delaware the online gaming industry is run exclusively by the state lottery –a similar method is in place in multiple European countries like Sweden, as well as in certain Canadian provinces. The state lottery then outsourced the work of developing and maintaining Delaware’s online gaming websites to Scientific Games and 888 Holdings, who were among over a dozen companies that applied for the job.

This is an interesting model, and it will be interesting to see whether Delaware’s or the model in place in New Jersey and Nevada will prevail in the long-run.

Hope for the little guy

Another way that Delaware could play a role in the US online gaming industry is by showing some of the other sparsely populated states in the union that they can still make money through online gambling.

With less than a million residents Delaware’s online gaming industry is never going to be a major cog in the state’s economy, but it does have the potential to provide the state with some added revenue.

Precisely how much Delaware can add to its coffers through its online gaming industry could very well sway other states to join them and pass their own online gambling legislation.

- Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus for OPR is the developing legal and legislative picture for regulated US online poker and gambling.
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