NFL joins slots and racing in Delaware, but Md. officials aren’t worried

October 1, 2009 6:11 PM
Fans at the sports book at Delaware Park in Wilmington keep track of their wagers during Sunday’s games.WILMINGTON, Del. — It’s about 30 minutes before kickoff of the Cleveland Browns-Baltimore Ravens game on Sunday. NFL jerseys dot the landscape, and lines swell to 20 people deep as fans rush to get everything in order so they can get back to their seats for the game.

But this isn’t M&T Bank Stadium — it’s Delaware Park, a race track and gaming venue just 65 miles up Interstate 95.

“I really wouldn’t come here without sports betting,” said Brian Taylor, 35, who came from Reisterstown with two of his friends to bet and watch the Ravens game. “I’ve been to [Las] Vegas to do some betting, and a one-hour drive is much easier than a five-hour flight out there.”

In the time between February, when Maryland accepted applications for slots operators, to last month, when the state awarded its first license, Delaware passed a bill legalizing sports betting and had it up and running for the National Football League’s opening weekend.

But Maryland officials say they aren’t too worried about one of its neighboring states offering yet another gaming option before slots arrive here, despite the number of Marylanders crossing the state line and wagering in Delaware on Sundays.

For one, the type of sports betting is limited due to a court battle with the pro sports leagues, which has kept down the potential revenue for Delaware. Also, while sports betting has encouraged “crossover play” on slot machines and horse races at Delaware tracks, different types of people typically bet on sports than play slots.

Therefore, Maryland officials say they can start winning back slots players from Delaware, which legalized that type of betting more than a decade ago, when the first parlor opens near Ocean City next year.

“A significant number of people in Maryland are going out of state to participate in slots,” said Donald Fry, chairman of the state’s Video Lottery Facility Location Commission. “Certain people like to do sports betting, and others like to play slots. … We need to focus on building the type of destination that will keep Maryland bettors staying here in state and attracting others from out of state.”

The competition across the border could have been worse — or better depending on your point of view. Delaware originally passed a law that would have allowed Vegas-style betting — including wagering on a single game and over-under bets — on all four of the major professional sports as well as college games.

But in July, the four pro leagues and the NCAA filed a federal lawsuit to block Delaware from allowing the same betting options as Vegas’.

The leagues contended that wagering in Delaware should be limited to parlay bets on NFL games, which is what was offered in 1976, the last time the state offered sports betting. Then, Delaware made no money from the program — in fact, it ended up approximately $150,000 in the hole — and sports betting was nixed after only a year.

A 1992 federal law banned betting on sports, but Delaware was grandfathered in the law along with Nevada, Oregon and Montana.

In August, a federal appeals court agreed with the leagues and limited Delaware to NFL parlay wagering, severely curtailing the state’s expected casino business.

Parlay betting requires bettors to wager on at least three games, and the odds are less favorable to gamblers than single-game betting.

“That kind of took the wind out of their sails,” said John Franzone, chair of the Maryland Racing Commission. “We’re not overly concerned about it.”

Delaware appealed this summer’s ruling, but a rehearing was denied this week by the 3rd U.S. Court of Appeals in Philadelphia. The state’s only recourse now is an appeal to the U.S. Supreme Court, which officials said is not likely.

“I just think — if we could have taken baseball bets coming into the playoffs, that would have really generated interest,” said Delaware Park General Manager Andrew Gentile. “We could have had this place filled all during the week instead of just Sundays.”

Nearly across the board, gamblers at Delaware Park last Sunday said they would have preferred straight betting instead of parlay. While it didn’t stop some Marylanders from making the trip to place their bets — Delaware requires all bets to be made in person — no one interviewed for this article came from farther away than the Baltimore area.

“If you come to do a parlay bet and expect to win, you’re a sucker — the house is so heavily favored,” said David Firestone, 40, of White Marsh. He said he limits his spending to about $40 and bets because it makes games involving teams other than the Ravens more interesting.

Some, however, had a different view on parlay betting.

“I think it’s awesome — I actually prefer it because it prevents me from putting $200 on one game,” said Richard J., a teacher from Baltimore who declined to give his last name.

Many echoed that idea Sunday, saying they likely would have spent more or placed more bets if single game wagering were available.

Most bettors said they set aside $40 to $100 to bet on games, although a few who described themselves as heavy bettors said they spend around $200 or more on Sundays.

That means everyone’s share of the pot will be much smaller than was hoped for, which affects the state’s revenue plans and the expected boost sports betting would have provided for horse racing’s purses.

Out of the total amount bet, winners get paid first. Then the state contractor responsible for running the games gets a 15 percent fee, and of what’s left, the state gets 50 percent, the casinos get 40 percent and 10 percent goes to enhance horse racing purses.

Initial estimates had sports betting bringing in about $3 million to the state’s general fund in its first year while adding another $14 million in crossover revenue from increased slot machine play.

That kind of revenue this fiscal year is now out of the question as Dover Downs, Delaware Park and Harrington Raceway combined for a total of $257,870 bet across more than 14,500 wagers during the opening weekend. The totals were lower than what some had hoped for, but race track managers said they are confident those numbers will go up.

That so far is playing out as gamblers bet $316,828 at all three tracks during week two, 23 percent more than the previous week, according to the state’s Department of Finance. The number of tickets sold jumped by 44 percent to 20,946. Last weekend’s numbers have not yet been released, but Dover Downs President and CEO Ed Suter said he believes the totals are even higher.

“I think word is spreading,” he said. “The parlay card is not as bad as it sounds.”

The latest estimates put the expected sports betting revenues, including crossover play, closer to $6.7 million.

Still, the funds are a welcome addition for a state that’s financially strapped and relies heavily on out-of-state visitors’ spending. The race tracks are also benefiting; managers say sports betting is attracting younger customers than the typical 55-and-older slots and horse racing crowd, and the new offering is expanding the casino’s geographical reach.

“We have five times the number of people here on Sundays now compared with just simulcast on Sundays,” said Gentile, who added that marketing the race track to a younger crowd has been one of Delaware Park’s biggest challenges.

Suter said simulcast wagering at Dover Downs has increased because of sports betting, although he could not be specific because the track’s official numbers weren’t scheduled to be released until the end of the financial quarter, which ended Wednesday.

“You can imagine sitting in that room and you tilt your head to the side and you see horses running, too,” he said. “Even though the demographics are different, they seem to be getting along. I’m very delighted so far.”

Delaware Park’s sports book seats about 3,500 and, although not overly packed last Sunday, the betting area’s two floors were filled. Dover Downs and Harrington, which seat a little more than 200 each in their sports books, reported similar stats.

But Delaware’s slots business, which is fed primarily by residents from Maryland, Pennsylvania and New Jersey, could be heading for shaky ground. Track managers said they feared losing business to Maryland when slots open here. Ocean Downs Racetrack, which got its license approved last month, is aiming to have an 800-machine parlor open by Memorial Day. That could potentially cut off slots traffic to southern Delaware from Maryland’s Eastern Shore.

Dover Downs, which Suter said gets about 40 percent of its customers from the Eastern Shore, will likely take a hit.

“It’ll affect my slots, not my sports betting,” Suter said. “They’re going to be competitive. We anticipate we’re going be hurt.”

A decision on Penn National Gaming’s bid for Perryville in Cecil County should come late this month, said Fry. That location could affect slots traffic to Delaware Park.

In addition to slots competition from Maryland, Delaware tracks are also anticipating losing business to Pennsylvania, which hopes to add table games to its casinos this winter....
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