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January 5, 2009


Bet on it: New push for sports gambling

Under new governor, chances of legalization could improve

By GINGER GIBSON and SEAN O'SULLIVAN
The News Journal

The chances for sports betting to be legalized in Delaware should improve when Gov. Ruth Ann Minner leaves office on Jan. 20, lawmakers say.

That's because the fight to add it to the state's gambling scene hit a snag when Minner announced in 2007 that she would veto any legislation to legalize it.

With a new administration set to take office, House Speaker Bob Gilligan, D-Sherwood Park, believes betting could be approved this legislative session, though it's unclear how it could help ease the state's expected $560 million budget shortfall.

"If we're going to do it, we're going to do it quickly," Gilligan said.

Many interviewed around Wilmington's Trolley Square Saturday said the state might as well legalize sports betting because the state already has taken the plunge with slot machines.

"Why not?" asked Ed Wolkind, 63, of Wilmington as he sat at the bar in Kid Sheleen's, football and basketball playing on the televisions around him. "It is a free country, we should have the option."

He said he expects it would bring in money, if for no other reason than it is something novel. "Let's try it," he said.

The previous version of the legislation to legalize sports betting -- House Bill 190 -- died in Sen. Nancy Cook's Finance Committee after it was approved in the House.

But Senate Speaker Pro Tempore Thurman Adams, D-Bridgeville, who decides which committees hear bills, said earlier this year that he expects it will get a Senate hearing, signaling the clearing of another hurdle.

One of the last obstacles is winning the approval of Gov.-elect Jack Markell, who takes office on Jan. 20 and remains undecided about the effort.

"I need to understand the costs and the benefits," Markell said. "It's something that I'll consider."

House Minority Leader Richard Cathcart, R-Middletown, said he expects the bill to be considered in the Legislature, but is unsure about passage.

"Gov. Minner will no longer be around and the threat of veto she hung over the Legislature's head is no longer going to be there," Cathcart said.

Larry Pelegrin, 64, of Wilmington, who was making a run to an ATM in Trolley Square Saturday, said the state should "absolutely" approve the measure.

He said Delaware already "cleared the moral hurdle" regarding gambling by legalizing slots and the lottery.

Sports betting "is an opportunity," he said, and is likely to bring in more money. "In these times, it is something you can't ignore."

Jesse Will, 25, of Wilmington said it is not as if people don't gamble on sports; it is just done illegally right now and the state can't touch that revenue.

"I don't see too much harm," added Joel Marcus, 38, of Newark. "And maybe if you legalize it and regulate it, you take some of the criminal element out of it."

Michelle Cooper, 26, and several friends who said they were headed to Delaware Park Saturday, fully supported adding sports betting and table games.

"Bring it on," said one.

"I won't have to go to a bookie and be worried he'll break my legs," said Chris Baker, 33, of Wilmington.

Back at Kid Sheleen's, a man who did not want to give his name said it seemed like a bad idea given the current economy. "It will push people further into debt," he said.

Economic result in dispute

Despite its improved chance for passage, sports betting won't solve the state's fiscal problems, lawmakers and other officials said. Even if it generates revenue, it will take months to set up before it starts to produce returns.

Sen. Patricia Blevins, D-Elsmere, said she hasn't seen a large push to get sports betting approved because most lawmakers have been occupied with the budget.

"I don't know that it's a huge revenue producer, but I might be able to be convinced," she said.

UD economics professors James Butkiewicz and Bill Latham released a report last summer that said a sports lottery would give the state an additional $1 million to $3.3 million per year.

Their findings disagree with The Governor's Task Force Report, which said sports betting would add $22.5 million to $30.6 million to state revenues in the first year alone.

They also dispute a report released by the state's gaming industry that said sports betting could bring in as much as $71 million.

Some national gaming experts said Delaware should approve sports betting if for no other reason than upping the state's "attraction factor" to gamblers.

Sports betting is the state's "ace in the hole" because Delaware is grandfathered under a national law preventing that kind of wagering, so Maryland and Pennsylvania can't offer it, said Roger Gros of the trade publication Global Gaming Business in 2004.

It gives people a reason to drive past nearby casinos to your casinos, he said.

Impact from Md. uncertain

David Gregor, an analyst with the state's Finance office, said revenue estimates for gambling -- including slots, the lottery and racetracks -- are declining in short- and long-term estimates made by the Delaware Economic and Financial Advisory Council, or DEFAC.

Gregor said his office has done no additional estimates on what kind of revenue sports betting could produce.

Until the legislation is actually signed into law, DEFAC won't include sports betting in its estimates, Gregor said.

DEFAC dropped the gambling revenue estimate for the current fiscal year three times because of the sagging economy, he said. The amount of play at state casinos in November was down 5.8 percent compared to last year.

The long-term estimates are even lower, Gregor said, because the state estimates about $70 million will be lost when Maryland institutes its recently approved slot machines.

Maryland also provides a tricky variable in estimating gambling revenues, he said, because there is no way to tell when they'll be up and running. The most conservative estimates have the new slots impacting Delaware in late 2010.

"When Pennsylvania did it, we thought we were fairly smart but maybe a little conservative on the timetable," Gregor said. "They surprised us and they took forever to get up and running."

State Rep. Greg Lavelle, R-Sharpley, said sports betting may gain some support if it's pitched as a way to increase competition since Maryland's approval of slots.

He also said he's not philosophically opposed to allowing more gambling in the state.

"You can't be a little pregnant. You gamble or you don't," Lavelle said, adding he wouldn't be opposed to adding table games to casinos.

When trying to estimate how much money sports betting could bring to the state, forecasters also have to consider whether new sports bettors also will be inclined to play the slots.

Sports betting also will require participants to make a double bet, wagering on the game's outcome and a more random variable, such as yardage in football or walked runners in baseball.

"There is a strange quirk that people have to make a double bet," Gilligan said.