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Delaware Sports Lottery Off To Shaky Start...By Jay Graziani

The nation's latest attempt at expanding sports betting beyond Nevada's borders hasn't gotten off to quite the start it may have hoped for.

Favorites in the NFL went 8-3-1 this Sunday, including 5-0-1 in the 1 PM games, and put a hurting on bookies in Delaware and everywhere else in the world they take bets on American football. In the sports gambling world, bettors love favorites, especially the popular, media-saturated teams. When those teams win en masse, as they did this Sunday, bettors celebrate and bookies cringe and slink off to lick their wounds until the next Sunday. This past week was one of those rare occasions when Joe Public just couldn't lose a bet, and Delaware sports books got creamed.

The big winning day by bettors triggered a "shutdown clause" in the Delaware sportsbook's software that froze payouts to bettors. Tickets weren't paid until after 1 PM Monday - a full 24 hours after Sunday's first kickoff. While this was only the first major glitch to befall Delaware's new endeavor, the confusion still left plenty of irate bettors at the ticket windows.

But despite the fact that all bettors were eventually paid, the upshot of all this is that the Delaware Sports Lottery lost money last weekend, and a good deal of it. It not just lost to the bettors, but also had to pay salaries, utilities, and the NFL Sunday Ticket subscriptions to watch the state coffers trickle out into the hands of the unwashed masses as favorite upon favorite rolled to lopsided victory.

Not that a loss at the ticket window is all that shocking - this is, after all, gambling. Even Joe Public has a winning week once in awhile, and reports have Vegas losing millions on last weekend's NFL slate. This season has not been particularly kind to bookies, legal or not, with favorites covering the spread in an unusually high 55% of games - typically underdogs are the ones above the 50% mark, making most bookies plenty happy. But not so far this season, and not in Delaware.

Delaware officials have publicly crowed about their increase in handle each week, and about the fact that they profited an average of nearly $60,000 per week in September. They're on-track to boost the state coffers by the extra $500,000 that was estimated before the season (revised substantially downward when a federal judge scuttled Delaware's attempt to offer more than NFL parlays). Or at least they were on track.

But even before this past weekend's beating, Delaware's figures wouldn't seem to make a strong case for the feasibility of state-run sportsbooks. A look into the reported Week Six gambling numbers shows that Delaware has more to worry about than software glitches.

Officials reported a total handle of about $586,000 from over 38,000 players. Quick division shows that comes out to about $15 per player. Not exactly a bunch of high rollers coming through the door.

Let's make the fairly safe assumption that most of these players are squares looking to throw away their money and we can give the house a generous 15% hold. The house share - about two and a quarter per player.

Subtract the overhead -- the TV's, ticket writers and staff salaries, electricity, computers -- and there's not much left to take home. Hope they're not giving out too many drink comps at those ticket windows.

And that's when things go according to plan and the bettors lose. This weekend was quite different. The "shutdown" of the casino software gives us an idea of the magnitude of Delaware's loss last week.

The casino software shutdown is tripped when the state's payout is twice the amount wagered plus $100,000, a safeguard to limit house losses. The previous week saw a reported handle of nearly $600,000, which implies Delaware is in the hole for at least $700,000 after this weekend.

Do the math - that's going to take 12 weeks worth of the September weekly average to make back. Hitting that $500,000 estimate for yearly profit is starting to look quite tricky for the Delaware sports books. Nearly halfway through the season, Delaware is in the ballpark of $300,000 in the red according to reported numbers, not exactly what might be called a successful trial run of East Coast sports betting.

As is, we have in Delaware a tepid system that has run into a rare streak of bad luck. Considering the scant profits and political firestorm surrounding gambling, it's hard to see how the Delaware casinos can continue to survive unless they expand to other sports, something that is out of reach unless legislative change happens on the federal level. And the temptation for other states to follow Delaware's lead into the bookie business should be quite diminished at this point.

Under the present circumstances, sports betting looks to have a very short lifespan on the East Coast.

Jay Graziani

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