Delaware iGaming Revenues Fall 14% to $1.8M In 2015

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Wednesday, January 20th, 2016 | Written by Shane Larson

Delaware’s online gambling market ended the year on a positive note, after reporting a 7.4% increase in revenues to $180,109, compared to the $169,606 collected in December of 2014. With all 12 months counted, however, The First State still experienced a contraction in its annual revenues, which fell by 14% to $1.8 million from the $2.1 million generated throughout 2014.

December 2015 iGaming Up 7.4%

In December, Delaware’s three iGaming operations generated $180,109 in revenues, representing two consecutive months of growth for the state. Nevertheless, the results are misleading as video lottery games continue to be the main source of online gaming business, and last month accounted for $129,985 of revenues, or 72% of overall iGaming income.

While video lottery games produced their best month to date, the same cannot be said for online casinos which had its second-worst month ever having generated a mere $18,999 in December. In the meantime, Delaware’s iPoker vertical collected $31,124 last month, up 8.9% from the $28,589 taken in December 2014. From that tally, Delaware Park continued to lead the market with $22,562 in revenues, followed by Dover Downs ($6,311) and Harrington Raceway ($2,250).

Player registrations also impressed in December, with 417 new accounts having been created, up from the 381 new signups in November, and higher by almost 48% from the 256 players who registered for online accounts in December 2014.

iGaming Revenues Down 14% in 2015

Delaware launched its iGaming industry in November 2013, and by the end of 2014 the state had generated $2.1 million in revenues. For the whole of 2015, however, that figure has now dropped to $1.8 million, representing a 14% contraction in the state’s online gambling market. Here are the Delaware Lottery’s 2015 iGaming revenue results by month:

January: $132,074
February: $143,101
March: $146,188
April: $132,154
May: $133,697
June: $108,692
July: $142,083
August: $158,979
September: $156,125
October: $182,969
November: $182,664
December: $180,109

iPoker Contracts By a Third

Throughout the whole of 2015, Delaware’s online poker market generated around $400,000 in revenues, which is around two-thirds the amount collected during the previous year. In January 2014, iPoker revenues peaked at $88,588, with the following months also producing impressive results, including February ($74,399), March ($84,476), and April ($74,153). By June, however, the novelty seems to have worn off and since then monthly iPoker revenues have fallen to the averages seen now of around $30,000.

iGaming Not The Money Earner Anticipated

When Delaware launched its online gambling industry, it had anticipated generating around $5 million in annual revenues, and consequently set a 100% tax rate on the first $3.75 million of iGaming revenue collected in any given year. Needless to say, Delaware’s initial revenue predictions were overly optimistic to say the least, and did not take account of difficulties experienced by operators, including trying to market unfamiliar brands, numerous technology issues, in addition to the state’s small gambling population. As a result, Delaware’s online operators have thus far failed to make any money since launching their products, and furthermore the exorbitant tax rates levied against them has made it unviable for them to spend any significant money advertising their wares.

The situation is even more drastic for online poker, which requires a large pool of players to produce an attractive environment, without which tournaments cannot run and enticing promotions and welcome bonuses cannot be offered. Even the interstate compact enacted with Nevada has failed to have any meaningful impact,

Waiting For US iGaming Expansion

Still, cautious observers have previously warned against putting too much stock in the state’s online gambling industry, and as state finance secretary Tom Cook had previously stated:

“We never picked this as being something to balance the budget. This is another tool in the toolbox and to stay competitive.”

To be fair, Delaware had anticipated more US states adopting regulation of their own after it did so in 2013, and in the meantime Delaware is well placed to take advantage of any future expansion which may take place in the future. As state lottery director Vernon Kirk explains:

“I don’t know what’s going to happen three years, five years, 10 years from now, but I do think whatever it is, it will be happening on the Internet, and this gives Delaware the opportunity to create an infrastructure that no matter what happens it will be well placed to take advantage of.”