Delaware iGaming Revenues Up, But Player Numbers Down In February

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Tuesday, March 18th, 2014 | Written by Charles Washington

The Delaware Lottery has released its Igaming results for February, revealing a 13% increase in revenues to $166,454 compared to the $145,276 reported for January. Poker, on the other hand, saw a 16% fall in rake and fees to $73,971 from $88,390 in January.

Igaming In Delaware

In April, 2013, Nevada was the first US state to launch regulated online poker, but by November Delaware became the first to offer online casino games, slots, and lottery tickets, making it the country’s first full-scale online gambling operation.

Three Delaware racinos were granted the right to offer poker through 888 powered software, and Delaware Park, Harrington and Dover Downs currently all share combined player pools, although each operates their own distinct branding and marketing. The USA’s other regulated igaming markets consist of New Jersey and Nevada.

Poker slips from 76% to just 44% of revenues

Before Delaware opened its market to internet gambling, revenues were projected to reach $5 million by the end of its first full year of operation, with $3.75 million subsequently directed towards state coffers. However, the Diamond State has so far underwhelmed initial forecasts and with four months of results now collected even $1.7 million in revenues for 2014 is seen as an optimistic assessment.

Breaking the latest monthly figure down further, Delaware had an all-time low of 693 players create new accounts in February, down from 1,006 in January, with the total number of internet gambling accounts in Delaware currently standing at 5,689. Continuing to dominate the online landscape is poker which accounted for $73,971 in revenues last month, followed by $64,986 for casino games, and $27,496 spent on slots and video poker.

Overall, Delaware’s online poker revenues of $73,971 was the second lowest tally since regulation began in November, when the state generated $67,928 in revenues. Poker now accounts for just 44% of total revenues compared with 76% in December.

Casino games, on the other hand, saw the amount wagered double from $1.1 million in January to $2.2 million in February, generating net earnings of $64,986.

Delaware Park leads Delaware poker market

Out of Delaware’s three racinos, Delaware Park generated $112,43 or around two-thirds of the state’s igaming revenues, with the gambling venue now accounting for 62% of all online poker revenues. It also registered just 293 new players, down from 1480 new players in November.

Next, Dover Downs generated $40,007 in revenues for February, or roughly one-quarter of the market, and 772 new customers, while Harrington produced $14,009 in revenues and attracted 402 new customers.

Delawares online gaming underwhelming so far

Delaware’s market is the smallest of the three states currently offering online gaming options in the US, and with a population of just 925,749 is also the 46th smallest state’s in the whole country. Consequently, player liquidity, which is essential for maintaining a healthy poker ecosystem, was always going to be a challenge for Delaware which recently signed a landmark online poker compact with Nevada. Commenting on the importance of the recent deal, KeyBanc Capital Markets investment banker Jay Masurekar, explained:

“When you are doing online gaming in a state like Delaware, there is just not enough population to bring in much revenue. Unless you have bigger states involved, it’s not going to work. In summary, Delaware may just be too small to fully take advantage of online gambling on its own.”

Ironically, New Jersey would have seemed the natural choice for Delaware with both states sharing a border, but New Jersey’s long standing rivalry over land-based casinos with Nevada has ensured they are unlikely to coordinate their efforts on the Internet.

Nevertheless, Delaware’s and Nevada’s interstate compact is expected to take roughly a year to implement, and with Delaware’s 888’s All American Poker Network (AAPN) currently not having an online presence in Nevada, the whole process has a long way to progress before Delaware can start offering a more attractive online poker environment for its players.

Lastly, Delaware’s online gambling industry will likely improve naturally as it smooths out initial technological and geo-locations problems, as well as dedicating more funds towards increased promotion and marketing efforts. Needless to say, Delaware igaming is still in its infancy, and as Frank Fantini from Delaware gaming publication Fantini Research, explains:

“It might be two, three years from now, we might say this [online gambling] is a nice little business in Delaware. But right now, it’s pretty slow.”