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!