Off Shore Gaming Association

There is an interesting wager that I have played over the last several years encompassing two races at Churchill over two days – the Oaks on Friday and the Derby on Saturday.

The ‘Oaks/Derby Double’ has been a way that some value can be found where there typically is an overwhelming, and rightfully so, favorite. Though many of my cohorts haven’t even heard of the wager, the public has, with the pool growing to over $2 million in the last few years. The double has been great fun for me, as there is an extra ‘live’ ticket going into the Derby and it has cashed twice for me in recent years.

In ’04  The play was Ahsado (Oaks) with Smarty Jones (Derby) paying over $60. In ’06 the wager was ultra wide with 5 horses in the Oaks over Barabaro. Unfortunately, Lemons Forever was not one of them. The longest shot on the board cashed at 47-1 and the play paid $890.00 – making me a fan of this wager forever. I got back on the winning side last year with ticket that cashed for $37.80 with Proud Spell and three others over Big Brown.

This year however the play is upside down – the prohibitive favorite is #6 Rachel Alexandra in the Oaks (Friday, May 1 - Churchill Race 11). The Derby field is wide open but this filly at under whelming odds of 3/5 makes for a bullet in this double. This is one wager where you can find value in a horse where there just is none.

Take any of the horses you like in the Derby as the backend end of the Oaks/Derby Double  and you should find pretty good value. Whether you like any of the Derby favorites such as I want Revenge, Dunkirk, Pioneer of the Nile or Friesan Fire or a handful of longer priced horses, couple them with Rachel Alexandra in the Oaks/Derby double and add that into your pile of potential winners come Derby Day.

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After 2 weeks of public hearings, the Delaware State House Gaming and Pari-mutuels Committee today, approved House Substitute 1, a stripped down version of HB100, and paved the way for legal sports betting in Delaware.

Recent public hearings, packed with employees of the states 3 racinos, spurred the bill sponsor, House Majority Leader Rep. Peter C. Schwartzkopf (D-14), to make significant changes to his initial bill. Major changes included no new casinos or gambling parlors and the creation of the Video and Sports Lottery Study Commission. Schwartzkopf ‘s new bill was released only last night, drawing ire from many present at the hearing. Still, the major components of sports betting and an annual license fee for existing racinos were left unchanged.

A representative from Governor Jack Markell’s (D) office urged lawmakers to act swiftly in the passage of this legislation. These politicians fully understand that the NFL season is the ‘mecca’ of sports betting. The Committee provided a time line to begin as soon as two weeks, so that the state would have ample time to build, implement and train, prior to the start of the 2009 NFL season.

Unilaterally, legislators feel the pressure of the NFL season looming, yet many are seeking additional time to review and work on the current legislation. A two-week time period was discussed, but it was pointed out that any delays in legislation may cause the start of Delaware sports betting to miss the first several weeks of the NFL season. When pressed for actual numbers by Rep. Bradford Bennett, (D-32) the Governors’ committee (after seeking out a calculator) revealed that any delays would cost the state over 2 million dollars per week (per NFL Betting weekend) in lost revenues.

In all, Delaware projects up to 35 million dollars (adjusted figures due to the economy were said to be between 22 and 30 million) in additional funds to the state coffers. However, opponents of the bill state insinuated that this is all “fuzzy math”. Acting both befuddled by the figures and argumentative as to their accuracy, members from both the Committee and the floor acted as if the figures were pie-in-the-sky. Apparently, the State is counting on ‘crossover’ players from sports to slot machines. They also added that their latest figures were arrived at using a formula that included the same 19% drop in revenue that Atlantic City, NJ is currently experiencing.

Opposition to this bill was wide-spread. Horsemen, racino executives and, of course, the NFL, all voiced opposition throughout the two weeks of hearings. However, only the NFL, opposed the sports betting portion of the bill consistently. The representatives from the casino and racing industries, vehemently opposed the greater tax burden being placed upon them, even going so far as to say these additional fees would bankrupt their industry.

The three current racinos, were asked “point blank”, if they plan to participate in sports betting in Delaware. All three racinos were in agreement that due to startup costs and a 50% revenue share, they could not commit to a definitive “yes” on the subject.

Who are they kidding? To have a monopoly on the only legal sports betting east of the Mississippi, no matter what the take-out, appears to be a no-brainer! Simply put, the only reason these racinos are hedging their bets is because of the additional taxes contained in the bill.

Over the next several weeks, vendors will be submitting proposals to provide sports betting services to the racinos. Oddly enough, offshore giant Pinnacle Sports, has thrown their hat into the ring. a Wilmington based lobbyist spoke with the OSGA and told our representative at the meeting that Pinnacle is anxious to begin the RFI (Request for Information) process. Pinnacle Sports has long been an industry leader with their “reduced juice” model. The lobbyist also told the OSGA that Pinnacle, with ten-plus years of experience, certainly can work within Delaware’s constitutional model, to provide an excellent betting product for the public and a profitable one for the state.

It is now up to current gambling industry representatives and state lawmakers to hash out final percentages and revenue shares. With the initial hurdle now cleared, this bill is headed into the Delaware House and Senate, ultimately landing on the Governor’s desk. Hopefully, an agreement will be reached shortly, as it is clear Governor Markell wants to exploit the Professional and Amateur Sports Protection Act of 1992, which gave Delaware the legal means to offer sports betting. In fact, it was the Governor’s representatives that were providing facts and figures supporting every aspect of Substitute Bill 1 at today’s Committee hearing!

If Delaware can come up with a sports betting product that players want, that gives the casinos a chance to reap some additional revenue AND can plug a hole in the state budget . . . Markell will sign it as fast as you can say Super Bowl. That’s a solid bet!

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There has been a flurry of activity throughout the sports gambling world regarding recent legislation proposed in Delaware to revive sports gambling in the State. Delaware’s Treasury needs money, as do all states’ coffers, but they are one of only four states legally allowed to engage in sports betting, due to existing federal law. Thus, Delaware House Bill 100 was crafted to enact Sports Betting back into law.

Yes, back into law.

Over three decades ago (1976) Delaware had sports betting. Two games came out initially in a ‘lottery’ setting. In Football Bonus, the wagering card contained a list of the week’s fourteen NFL games divided into two pools of seven games. To win, a player had to place a bet and correctly project the winners of all seven games in one or both of the two pools. Prize amounts were determined on a pari-mutuel basis. In Touchdown, the wagering card listed the week’s fourteen games along with three ranges of point spreads. To win, a player had to select both the winning team and the winning margin in each of three, four, or five games. Prize amounts were again determined on a pari-mutuel basis. Finally, they introduced Touchdown II, which replaced Touchdown mid-season, in which a predicted point spread on each of twelve games was published before the games. The player had to select a team to do better in the game than the stated point spread. To win, the player had to choose correctly with respect to each of four-to-twelve games There was a fixed payoff depending on the number of games on which a player bet (I believe 10-1 for four teams).

Though the last game was introduced to increases handle with better payoff odds for participants, it was short lived. Football betting began during the first week of September 1976, but the games were cancelled after fourteen weeks, before the season ended. The lottery collapsed when the Lottery Office offered a bad line on an upcoming weekend’s Touchdown II games that threatened to cause the state huge losses, and then attempted to avoid such losses by canceling that weekend’s lottery and offering refunds to bettors instead of paying the winning bets. The lottery had already picked the wrong favorite in two games and missed the margin in three others, which had apparently spurred heavy betting, particularly among professional gamblers. Attorney General Wier, however, ruled at the time that the Lottery was required to honor its commitment to pay the winning wagers. Although the winning bets did end up getting paid, the debacle left the football lottery mortally wounded, and it was permanently cancelled.

Delaware is again looking to introduce this exact type of football wagering – parlay cards. The State Constitution apparently will only allow for games of chance, except in a pari-mutual setting. And pari-mutuel sports betting will simply attract very few gamblers. So a re-incarnation of the Touchdown II game is the inevitable solution. There are also laws in Delaware regarding minimum 30% payoffs to the state that are required of any game of chance. The fact that players could in theory, ‘ beat the house’ or the state one weekend, may also void the concept of these parlay cards. In 1976, lawmakers got around this by stating that the 30% would be paid over the course of the year.

We traveled down to Dover, DE for the recent public hearing on HB 100 and found out that there is more to the legislation than just sports betting, and these additional pieces may make it even tougher for this legislation to pass than getting around exiting lottery laws. There are two aspects of HB 100 that are causing a the majority of public outcry, and neither is the sports betting portion of the bill. There are 1) plans to open three more casinos AND 2) to levy heavier taxes on both the existing racinos and the proposed casinos. This has caused the casinos operators, horsemen and casino employees to fill public hearings, to the point of overflow. Monday’s affair in Dover was a real eye-opener for us.

Dozens of employees from Dover Downs plead their cases in front of the Legislature. They begged the lawmakers not to open more gambling houses, as the competition would surely make them lose their jobs. Their tirades and stories were met with huge applause from the partisan Dover Downs crowd. Representatives from Dover Downs showed declining gaming statistics amid debt projections and the collapse of the horse racing industry. A retired jockey spoke of the good years of racing in Delaware, after slots were introduced. The tiny man urged House members to see that revenue will be siphoned off of racinos and into slot parlors and that this will hurt purses and their way of life. Representatives form the Equine industry spoke of how breeding and even hay production would be affected by lost racino revenue.

Only three people spoke about sports wagering amid the 20 or so speakers. One, who claimed to have been on the bookmakers side of the counter at the Mirage for over a dozen years, urged lawmakers to hire solid people and experienced companies to run the wagering, so that 1976 would not be repeated. A second, from Dover Downs said during his diatribe, “after five years in the making, I cannot believe that I am going to come out against sports betting in Delaware”. Shocking, a casino operator would not want to open more wagering options! He did go on to say that sports betting in the parlay form that is being discussed, with odds they are proposing (we have heard as low as 7/5 on a two team card) simply will not attract bettors. Thus, the states revenue figures are horribly misguided and adding sports betting will not help Dover Downs, it will hurt.

Finally, there was the NFL. The representative simply got up to state on the record that the NFL opposes the expansion of sports betting, in any form, in any state. He also wanted to make sure they got the memorandum from the NFL.

I did speak with the NFL rep after the hearing and he was cordial. I asked how the NFL could be so hypocritical as to think that no one bets on their games. He said that the NFL, of course, does know that betting is widspread, but it does not want to expand gambling on their games beyond where it is now. He also stated that the odds that are being proposed are so unfair, that the NFL would never sanction the proposed games. He also mentioned problem gambling, news classes of gamblers and other rhetoric designed to makes us think that the NFL really doesn’t want betting on their games. In reality, I got the feeling that he figured HB 100 had such a small chance of success in Delaware that the NFL was going to sit on the sidelines and see how it plays out before bringing in any big guns.

So, will we see sports betting in Delaware? Who knows? But, there is another public hearing on Monday, April 6 and we will again be attending.

We had signed up to make a statement this past week, but got bumped and were never given the poorptunity to speak. We plan to urge Delaware to create a bill specifically for Sports Betting and to offer straight betting, not just parlay cards. We will urge the Legislature to empower their state to be the only sports betting destination East of the Mississippi. But, we will also point out that gamblers are used to 110 to win 100 or 2.6/1 on a two team parlay. Anything less, will simply keep the majority of sports bettors playing where they do now – either offshore or with a local bookie.

We welcome your comments below and urge public input from Delawarians.

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