Delaware Daily Fantasy Sports

Delaware is a fan-friendly DFS state regulated by the Division of Gaming Enforcement and governed by laws emphasizing consumer protection.

State law requires all Delaware fantasy sports sites to apply for licenses, undergo background checks, and submit their internal consumer protection policies to the Division for approval.

High licensing fees and taxes artificially limit the Delaware fantasy sports market somewhat, but several major DFS brands featuring varied contest types are available to residents 18 and older.

Delaware Fantasy Sports Sites

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All Delaware fantasy sports sites must submit registration applications to the Division of Gaming Enforcement and receive approval before offering their services to residents.

Delaware’s DFS regulations largely resemble those implemented in other states, but only a handful of operators have applied for licenses to date.

High registration fees and a relatively high 15.5% tax on in-state revenues combined with the state’s small population have dissuaded most of the industry’s smaller daily fantasy sports brands from submitting registration applications in Delaware.

Only four DFS apps are licensed to operate in Delaware, but that’s still three more options than the regulated Delaware online sports betting market offers.

Licensed Delaware DFS Sites

Delaware Fantasy Pick ‘Em Apps

PrizePicks is the only fantasy pick ‘em app licensed by the Division of Gaming Enforcement. Fortunately, PrizePicks is the fantasy pick ‘em app most fans prefer thanks to its varied game types and wide sports coverage.

Like most states, Delaware has not yet passed legislation specifically addressing fantasy pick ‘em contests. However, the Division of Gaming Enforcement apparently interprets Delaware’s DFS laws as follows:

  • Pick ‘em contests played against the house are prohibited
  • Pick ‘em contests played against other users are permitted

To be clear, the Division of Gaming Enforcement hasn’t published an official position on the legality of pick ‘em fantasy sports in Delaware. The above is merely an assumption based on PrizePicks receiving a Delaware DFS license for its peer-to-peer Pick ‘Em Arena contests, which it developed specifically for states that prohibit player-vs-house contests.

Players can read more about Pick ‘Em Arena and how it works in our full PrizePicks review.

Delaware Daily Fantasy Sports Laws

Note: The following overview of Delaware’s daily fantasy sports laws covers key points only and is paraphrased and organized for simplicity’s sake. Readers can view Delaware’s daily fantasy sports laws and regulations in full here:

Individuals or entities that wish to offer paid daily fantasy sports in Delaware must submit registration applications to the Division of Gaming Enforcement.

In addition, applicants must authorize the regulatory authorities in every state where they operate to release information to the Division and share whether they have ever been denied a DFS license in another jurisdiction.

Applicants must also provide copies of their internal policies and procedures related to the following:

  • Customer age, location, and identity verification
  • Encouraging responsible play
  • Prevention of minors and self-excluded individuals from accessing the DFS platform
  • Receiving and responding to customer complaints; reporting complaints to the Division
  • Safekeeping customer deposits
  • Cybersecurity

Once approved, fantasy sports operators in Delaware must pay the following licensing and operating fees:

  • Annual licensing fee: $50,000
  • Quarterly operating fee: 15.5% of in-state revenue

Delaware DFS laws require operators to protect customers’ funds and private information.

More specifically, operators must employ “commercially and technologically reasonable measures” to do the following:

  • Limit customers to one account each
  • Verify customers’ locations, identities, and detect the use of proxy servers used to mask customers’ physical locations
  • Keep customers’ funds in segregated accounts that are separate from the operator’s funds “and otherwise protected from corporate insolvency, financial risk, or criminal or civil actions”
  • Protect the privacy and online security of customer accounts
  • Prevent unauthorized withdrawals from customers’ accounts

Additionally, Delaware’s DFS laws include numerous provisions related to customer complaints:

  • Operators must provide initial responses to customer complaints within 48 hours
  • Operators must provide full responses within ten business days
  • Operators must retain records of all customer complaints for at least three years
  • Operator must retain permanent records summarizing customer complaints and their resolutions
  • The Division of Gaming Enforcement website must maintain a form for customers to submit complaints directly to the Division

Registered Delaware daily fantasy sports apps and websites must:

  • Identify highly experienced players* to other customers on the platform using symbols or other easily visible means
  • Prohibit the use of third-party scripts and programs that submit entry fees or select athletes on behalf of players
  • Use commercially and technologically reasonable means to prevent cheating, collusion, and third-party scripts/programs
  • Prohibit employees/insiders of DFS operators from sharing nonpublic information that could affect the outcomes of fantasy sports contests

*Delaware law defines “highly experienced players” as customers who have entered 1,000+ contests or won at least three prizes worth $1,000 or more on a single DFS platform

Fantasy sports operators in Delaware may not issue advertisements that:

  • Contain inaccurate or misleading information about the chances of winning and number of winners
  • Highlight average winnings without equally highlighting the average net winnings of all players
  • Target prohibited participants, minors, or self-excluded individuals

Licensed Delaware fantasy sports apps must encourage responsible play by:

  • Prominently displaying information about assistance with compulsive play, including a toll-free help number
  • Providing mechanisms for customers to self-exclude from entering DFS contests
  • Refraining from direct marketing to customers who have self-excluded
  • Withholding prizes from self-excluded individuals who engage in unauthorized play
  • Training employees on identifying and assisting customers who display signs of compulsive play
  • Not extending credit to customers

How Delaware Legalized Daily Fantasy Sports

Daily fantasy sports apps have operated in Delaware since their inception, including several years before the state formally legalized DFS contests.

Legal developments in 2016 forced the Delaware legislature to address the issue head-on, culminating in legislation to legalize and regulate daily fantasy sports.

The DFS industry operated in Delaware without issue initially, but the Delaware Department of Justice interrupted the status quo in March 2016 when it issued an opinion stating that daily fantasy sports sites were operating contrary to state gambling laws.

In a statement, the DOJ explained that daily fantasy sports operators were violating Article 2, Section 17 of the Delaware Constitution. The relevant text prohibits all forms of gambling not expressly authorized by the Constitution.

The DOJ opinion further explained that it classifies daily fantasy sports contests as gambling in Delaware based on two factors:

  • Fantasy contests involve monetary rewards and require payment to participate
  • Chance, as opposed to skill, is the dominant factor in the outcomes of fantasy sports contests

Although DFS proponents have long contended that Delaware fantasy sports contests are games of skill, the DOJ saw the issue differently:

“An online fantasy sports contestant selects fantasy players and teams, but has no role in how these players actually perform once the real-life games or events occur.

Real-life players perform better on some days than on others. The weather can affect how a real-life player performs. A manager or coach can decide not to use certain real-life players, who may be injured during a game or, for example in the football context, may not run the ball as often or catch as many passes as a skilled participant might expect.

The most skilled participants might lose and less skilled participants might win because of what actually happens during the real-life game. In other words, real-life players are human and human behavior is unpredictable.

This is why chance – and not skill – is the dominant factor in online fantasy sports contests and why these contests are illegal in Delaware.”

The Department of Justice agreed not to take action against FanDuel, DraftKings, and Yahoo until after the Delaware legislature decided the fate of a bill that sought to legalize and regulate DFS contests.

The bill in question failed to pass later in 2016. Subsequently, the Delaware DOJ sent cease-and-desist letters to FanDuel, DraftKings, and Yahoo Fantasy Sports.

The letters resulted in all three operators exiting the Delaware fantasy sports market.

The Delaware legislature reexamined the issue in 2017 and approved HB 249 to legalize daily fantasy sports, implement consumer protection regulations, and grant oversight authority to the Division of Gaming Enforcement.

In 2019, lawmakers passed HB 190 to amend the law and make the Delaware daily fantasy sports market more hospitable for operators and fans.

Initially, Delaware’s DFS laws required operators to pay privilege fees equal to the greater of (a) 15.5% of their in-state revenue or (b) the equivalent of the highest tax rate set by any other state.

The original law also prohibited all DFS contests based on collegiate sports.

HB 190 reduced operators’ potential tax liabilities by making the privilege fee a flat 15.5% of their in-state revenue. Additionally, HB 190 permitted licensed fantasy sports sites to offer contests based on collegiate events not involving Delaware colleges.

Delaware Fantasy Sports FAQ

Yes. Delaware legalized and regulated daily fantasy sports in 2017.

Yes. Operators may offer peer-to-peer fantasy pick ‘em contests in Delaware.

Delaware law requires customers to be 18 or older to participate in daily fantasy sports contests.

Yes. Daily fantasy sports winnings are subject to state and federal income taxes.