Is Delaware-style Sports Betting the Future?

Taverns field NFL wagers with state's PASPA pass

by , Jan 8, 2013 | 1:00 pm

FootballSportsBettingAs the legal battle involving sports gambling moves to the next round in New Jersey, Delaware continues to experience a payoff from its decision to expand its limited sports lottery involving professional football games.

Now gamblers can bet not only in the state’s three racetrack casinos, but also in 31 restaurants, bars and nightclubs throughout Delaware.

Through 20 weeks, including the National Football League preseason, business is up 42.4 percent for the lottery to $22 million, compared with $15.4 million through the same period last year. And the expansion is not hurting its existing casino business, according to a state lottery official.

“The three casinos are showing no cannibalization and are up an aggregate of $1.2 million themselves, an increase of almost 8 percent,” said Vernon Kirk, director of the Delaware Lottery.

Sports betting in Delaware is limited to wagers on NFL games only using parlay cards, with a minimum bet of $2. There is a minimum of three games on each card, according to the state lottery.

Kirk said expanding sports betting has accomplished several goals, including making access to the betting terminals more convenient and expanding the player base. That base includes football fans from neighboring states looking to bet on the NFL.

“Bettors are welcome from states other than Delaware, however they must be in-state and on-site to wager,” Kirk said. “They may return to Delaware to collect or they have the option to mail in their ticket for payment by the lottery.”

It’s also been profitable for one Las Vegas-based bookmaker.

“Brandywine Bookmaking, which is now owned by William Hill, is the exclusive risk manager for the Delaware Lottery through a partnership with Scientific Games,” CEO Joe Asher said. “Our role is that we work under the direction of their lottery, determine the product offering, set the odds and point spreads and manage the risk.”

Asher declined to discuss the company’s Delaware earnings.

HAVING A DRINK, MAKING A BET

For tavern and bar owners, the expansion of NFL wagering has been good for business.

“I was very involved in getting this expansion passed last year,” said Paul Ogden, owner of the Famous Tavern chain and president of the Delaware Tap Room Association. “What I said when I testified was it would put butts in the seats, and it’s done exactly that.”

Four of Ogden’s five locations have sports betting retail terminals. He said he’ll lobby the lottery for six machines, including one for his sixth location scheduled to open this year.

Ogden said the average parlay purchase is $10, and that sports betting in bars and taverns is “something to do while they’re watching a game and having a beer.”

“It keeps them here eating and drinking,” he said.

Bars and restaurants with terminals from the Delaware Lottery receive a 5 percent commission on parlay sales, along with a 1 percent for every ticket cashed.

“I’m happy with 5 percent,” Ogden said. “We are more profitable with sports betting. This has been great for business.”

The expansion was approved in June as part of a new law allowing online wagering on slots and table games, which Delaware Lottery officials run through the websites of the state’s three racetrack casinos.

Delaware is one of four states that legally can offer sports betting under the 1992 federal Professional and Amateur Sports Protection Act, or PASPA. Nevada is the only state in which full race and sports books operate, while sports wagering is also legal in Oregon and Montana.

The Oregon Lottery eliminated its Sports Action betting game in 2007 after Super Bowl XLI. The 2005 Oregon Legislature overwhelmingly voted to abolish Sports Action, hoping to encourage the NCAA to end its ban on hosting basketball tournament games in the state.

“Sports Action was based on professional football,” said Chuck Baumann, an Oregon Lottery spokesman. “We have had second-round games in Portland, so the NCAA has been true to their word.”

Baumann said the lottery “still has the ability to offer” Sports Action, but didn’t expect the “niche game” to return anytime soon. Sports Action generated only some $2.25 million a year in the Oregon Lottery’s net proceeds.

The Montana Lottery operates fantasy football and auto racing games.

“They are fantasy games, just like any other that are based on player performance, not the outcome of a game,” said Daniel Iverson, a spokesman with the Montana Lottery. “We were grandfathered in, in 1992. This has been our only involvement in any sports-related gambling.”

NEW JERSEY’S FIGHT

New Jersey has been trying to add itself to that exclusive list.

Gov. Chris Christie in January 2012 signed a bill allowing sports betting at the state’s 12 casinos and four racetracks. The decision was quickly challenged in federal court by professional leagues that argued the bill is a “clear and flagrant violation” of PASPA.

The NCAA and four professional sports leagues – the NFL, Major League Baseball, the National Basketball Association and the National Hockey League – are moving forward with their court fight over New Jersey’s plans to allow sports gambling.

That decision follows a federal judge’s decision last month rejecting arguments that the leagues couldn’t prove they would be harmed by the widespread introduction of sports wagering in New Jersey.

New Jersey is arguing that laws banning sports betting are unconstitutional, especially because betting is allowed in Nevada and forms of sports betting are allowed in three other states.

U.S. District Judge Michael Shipp is expected to set a trial date after Jan. 20.

“We are following that fight very carefully. We think New Jersey will win,” said Ogden, whose Famous Taverns in northern New Castle County, Del., attracts gamblers from Pennsylvania looking to bet on NFL games.

Ogden said more than half of his business is from customers from other states. He said three of his five bars are strategically placed near the Pennsylvania border.

Asher said William Hill is “watching the progress of the New Jersey litigation.”

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893. Follow @sierotyfeatures on Twitter.
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