Delaware Online Poker Update

Delaware online poker

Delaware became the second state to legalize and regulate online poker.  It was the first state to legalize online casino games.  The bill giving this power to the Delaware Lottery passed the state legislature in June 2012.  Casino games went live on November 1, 2013.  Online poker launched a week later.  This was about five months after Ultimate Poker became the first legal U.S. poker site on Nevada on April 30, 2013.  Delaware beat New Jersey to the regulated online gaming market by three weeks.  

Delaware took a different approach than Nevada did.  The Delaware Lottery operates online gaming in the state.  Nevada gives this power to the state’s casino industry.  New Jersey later followed the same model as Nevada.  Those are the only three states with legal online gaming in the United States.

The Delaware Lottery networks three skins for its poker platform.  These operate under the brands of the state’s racinos.  The three skins are Dover Downs, Delaware Park and Harrington Raceway.

Online gaming revenue in Delaware has fallen well below expectations.  The first full month of online gaming in November 2013 generated $68,000 in poker rake but just $43,000 in casino win.  Casino win increases nearly every month, however, poker rake cratered to just $21,000 as of June 2017.

The Delaware Internet Lottery experienced serious growth in 2016.  Casino games win about $200,000 per month.  Online slots and video poker win about double the amount taken at the blackjack and roulette tables.  Poker rake continues to hover in the $20,000 range.  

The low level of poker rake is even more disappointing when considering the fact that Delaware pooled its poker liquidity with Nevada in March 2015.  The first full month of shared poker player pools generated $48,000 in rake.  That number is down more than 50% since the liquidity merger.

Tax Rate Affects Operator Revenue

The Delaware Lottery taxes the first $3 million in annual online gaming revenue at 100 percent.  Online games have not broken the $3 million level, meaning that operators have yet to see $1 for their participation.  Even if they did, the tax rate is 43.5%, equal to what Delaware casinos pay on live slots and video poker.

This gives little motivation to Delaware racinos to advertise online gaming.  There are no affiliate programs and links on the racino websites to online gaming are not prominent.  Most sites have a small tab on a side or top menu to the games.  There are no TV, radio or website ads promoting the games.  

Lack of Casino Games Contributes to Poor Performance

888 won the online casino contract for the Delaware Lottery.  It spreads one of the blandest online casino platforms in the world.  Only 16 slot games are available to Delaware casino players.  New Jersey casino sites often spread hundreds of slot titles.  

There are no slot titles Delaware players recognize.  All slots spread on the 888 Delaware casino platform are proprietary to the company and are not available in the state’s casinos.  

Jacks or Better is the only video poker title available.  The only table games spread are blackjack and roulette.  

The tax situation creates a scenario where there is no incentive to advertise online gaming in Delaware.  The lack of funds to pay royalties to game makers limits the available options to casino players.  These issues create a poor online gaming environment to Delaware players and have made it difficult to operate a profitable product in the state.