Delaware Online Gambling: Preliminary Regulations Released
Delaware Lottery officials this week have released the first draft of the proposed regulations for the state’s upcoming online-gaming offerings, including poker. While an official launch date remains a few months off, Delaware has opened up the proposed regulations for public comment, similar to when they made a public call earlier this for factors to be regarded in constructing the regulations.
For the direct link to the regulations, click here… and feel free to leave those comments. Meanwhile, FlushDraw gives you a head start regarding what the regulations contain
Licensing of Technology Providers
While much of the early draft concerns itself with the licensing of online lottery booths, poker interests become relevant in the proposal’s Section 5, dealing with the licensing of technology providers. As in other states, Delaware will likely partition its technology vendors along the lines of hardware / software / operational services.
Delaware, it should be noted, has already selected a primary vendor for many of the services, a tripartite bid consisting of Scientific Games, 888 Holdings (who will likely supply poker software to the state) and Williams Interactive. In selecting the secondary vendors, these are some of the required elements for applicants:
- Background check
- Previous corporate history
- Disclosure of investigations regarding (and results thereof) applicants’ operations in other jurisdictions. The proposed Section 5.3.4: “Require the applicant to disclose whether the applicant, or any of its present or former officers, directors, owners, partners, key employees, or Internet lottery operations employees, is or has been the subject of an investigation in another jurisdiction, the nature of the investigation, and the outcome, if any, of such investigation.”
- Information regarding all key employees and related corporate entities. The proposed Section 5.3.6: “Require the applicant to disclose its legal name, form or entity (e.g., general or limited partnership, corporation), the names, addresses, social security numbers and dates of birth of its directors, officers, partners, owners, key employees and Internet lottery operations employees.”
- Audited corporate financials
- Risk management plan
There’s a neat shortcut in the proposed Section 5.9, which allows the Delaware Lottery to execute an abbreviated approval process for any applicant who has already passed a similar process in another state, all at Delaware’s discretion. The reason? Delaware really wants to have its online gambling systems up and running by the end of September, though it seems likely that they’ll now miss that by a month or two.
Anyhow, the Section 5.9 text: “Notwithstanding any other provision contained herein to the contrary, the Director may determine, on review of the licensing standards of another state, that such standards are so comprehensive, thorough, and provide similar adequate safeguards, that the license of an applicant in such other state precludes the necessity of a full application and background check. In such case, the Director shall require a limited application and background check, as determined by the Director in his sole discretion, as are necessary to assure that the applicant is fit for the license….”
Proposed Player Requirements
Another area of special interest is Section 13, Customers: Registration, Funds and Protection. Here’s some of what Delaware initially proposes:
- Real-money gaming will be open to Delaware residents only, age 21 and older; ID and geolocation verification will be used. However, anyone, regardless of age or location, will be able to play the state’s free-play offerings.
- Cell-phone numbers, social security numbers, and verified e-mail addresses will be required for all real-money players.
- No multi-accounting. Players will be restricted to one account only, “provided the Internet lottery system employs a method of preventing inappropriate or fraudulent play resulting from an individual attempting to log on at more than one agent’s site at the same time.”
- No player-to-player (P2P) transfers. This echoes the system already in place in Nevada, where P2P transfers are not allowed, as an extra hedge against money-laundering activity.
- Self-exclusion: Not only can players self-exclude, but Delaware residents who have previously excluded themselves from the state’s land-based lottery outlets won’t be able to play any of the state’s new offerings, including poker.
- Inactive accounts with real-money balances will be forfeited to the state after five (5) years of inactivity.
There’s much more in the regulations, from player loyalty programs to accounting procedures to allowable marketing and data privacy. It’s all worth a read for Delaware residents wondering how the new state will work, or for industry wonks looking to add to their working knowledge of how an online gambling system is likely to work inside a robust regulatory framework. Delaware online gambling is now only a few months away from going live.