Delaware’s iGaming Market Hits All Time High in March

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Monday, April 25th, 2016 | Written by Shane Larson

Delaware’s internet gambling industry has started this year on a winning note, with all three months of the first quarter producing positive year-over-year results. That translates into a 36% revenue increase to $190,829 in January; a 60% increase to $229,789 in February; and now a whopping 78% increase to $260,539 in March, representing an all-time high for the state.

iGaming at a Record High

Delaware’s online gambling market reached a record high in March, with Delaware Park leading the way with $149,346 in revenues, followed by Dover Downs with $86,554, and Harrington Raceway with $24,639 in earnings, according to the Delaware Lottery. As well as their combined figure of $260,539 being 78% up on the $146,188 generated for March 2016, it was also 13.4% higher than February’s tally.

Video Lottery Terminals

The First State’s record iGaming revenues were helped in no small part by revenues collected by online video lottery terminal (VLT) games, which produced $154,794 in March, smashing the former high of $138,391 set this January. That figure was also a huge 49% more than the $103,596 collected in the previous month. Accounting for $64,642 of that total was Delaware Park, followed by Dover Downs ($64,487), and then Harrington ($25,665).

Online Casino Games

Online casino games, which includes roulette, blackjack and slots, generated revenues of $68,420 in March, lower by 30% from the $97,899 collected during the previous month. While iCasino revenues came in at a healthy $64,256 for Delaware Park, business at the state’s two other operations were significantly lower due to a favorable winning month for the site’s gamblers. As a result, Dover Downs collected a minute $6,539 in March, while for Harrington Raceway that figure was a mere $2,375.

Online Poker

In March, Delaware’s online poker revenues reached $37,324, which was 32% more than February. Leading the way in March was Delaware Park with $20,447, followed by Dover Downs with $15,527, and Harrington Raceway with $1,349. Nevertheless, last month’s tally was still 14.5% lower than the $43,636 collected in March 2015. It was, however, the highest total iPoker revenues since the $39,245 generated in May 2015. Online poker revenues have tailed off significantly following the first four months post-regulation when revenues never dipped below $74,000, with December 2014 marking a record high for Delaware’s poker sites with $106,923 collected in revenues.

Liquidity Not The Only Problem

In the past, Delaware’s minuscule online poker revenues was believed to be a result of its small market size, and therefore player liquidity. It would now seem that liquidity is not the only problem, though, as the interstate compact enacted by Delaware and Nevada in March of 2015 has thus far failed to have any significant positive impact on the state of the industry. The low participation rates by poker players has also meant Delaware’s three poker operators are reluctant to shell out any great amounts on marketing, which has consequently adversely affected the vertical further.

The Story So Far in 2016

In 2015, Delaware’s online gambling market collected $1.8 million in revenues, lower by 14% compared to the $2.1 million generated in 2014. This year, however, is currently on track to be the most lucrative yet since regulation was introduced at the end of 2013. Nevertheless, such figures are no where near the amounts forecast prior to legislation, with the unrealistic tax rates set before the actual figures could be analyzed now seriously affecting Delaware’s three iGambling operators. Case in point, post-regulation Delaware had anticipated yearly revenues of around $5 million, and so insisted that a full 100% tax be imposed on the first $3.75 million collected by state gambling operators. Needless to say, said operators have been losing money since regulation, and are a long way away from ever seeing a return on their investments.

Record Month for US iGaming

Delaware was not the only regulated US state to post record online gambling revenues in March, with New Jersey’s market also reporting revenues at an all-time high last month. Moreover, the revenues of $15.5 million it generated was a 16% increase compared to the $13.2 million that was collected for the same month in 2015. If that wasn’t encouraging enough, the Garden State has now reported record revenues for each of the last five months.

Accounting for most of its revenues in March was online casinos which noted a 20% increase in business to $13.04 million from $10.9 million for the same month in 2015. Even poker experienced year-on-year growth, helped in no small part by the launch of PokerStars NJ at the end of March. As a result, online poker generated an impressive $2.46 million, up 23.6% from the $2.22 million taken in March last year.