While state officials, legislators and casino owners furrow their brows over what to do now that sports betting in Delaware has been short-circuited, one expert wants them to know that they weren’t going to get anywhere near the money they projected from the scheme, even if it worked flawlessly.

While state officials, legislators and casino owners furrow their brows over what to do now that sports betting in Delaware has been short-circuited, one expert wants them to know that they weren’t going to get anywhere near the money they projected from the scheme, even if it worked flawlessly.

University of Nevada-Reno professor William R. Eadington said the state was not being realistic in estimating how much revenue sports betting could generate in Delaware.

Eadington is chairman of the university’s Institute for the Study of Gambling and Commercial Gaming and has spent years analyzing the economics of the casino business using the best data in the country — Nevada’s.

That state has approximately 180 sports betting locations, which generated more than $125 million in gross revenue last fiscal year, or 1.2 percent of total gambling revenues statewide.

From that, the state took about $8 million in taxes.

Granted, taxes on casinos are much higher here than in Nevada, but Eadington said Delaware’s projected $3 million in tax revenue from sports betting is way too high for a state that has two-thirds fewer residents than Nevada and only three casinos.

“Delaware’s expectations were always way out of line, they’re not going to get nearly as good a product as Nevada,” he said. “Delaware would have three specific sites where they would offer sports wagering and they’re not destination resorts and they’re not as attractive.”

The state also was counting on approximately $14 million in so-called “crossover play,” where bettors who come for sports end up spending money on other forms of gambling like slot machines.

Eadington said the idea of “crossover play” as it’s applied to sports betting is way off base.

“People who like to bet on sports are very often sports aficionados and are much more analytical than typical casino customers. They would typically be very active readers of sports pages, of blogs, of injury reports, and a lot of very specific information, more similar to horse race bettors than slots players,” he said. “The motivation is to win money in the long term and apply your knowledge and demonstrate that you’re smart enough to overcome the house advantage.”

While Eadington said that sports bettors would be more likely to play table games as well, there’s no reason to think that either a sports bettor or a table game player would put a nickel in a slot machine.

Delaware had more to worry about the economics of sports betting than the threat of a legal challenge, Eadington said.

“The Delaware issue was always difficult, sports betting is just a difficult segment of the gaming market to tax heavily and to generate a lot of tax revenue from,” he said. “With sports betting you just don’t get the volume, the market is that much smaller. For every true sports bettor there are probably 100 slots players.”

If after Delaware exhausts all of its options for appeal it’s determined the state can offer only parlay bets, the likelihood of attracting any serious bettors slips even further, Eadington said.

In Nevada, revenues from parlays grossed approximately $20 million last fiscal year, or about 0.2 percent of gaming revenues statewide.

According to Eadington, parlays have several disadvantages that diminish their popularity.

“Once you get to three or more events on a card it starts picking up more of the characteristics of a lottery,” he said. “To analyze say four or five teams to pick which of the teams are gong to win, especially when the parlay card is generating about 30 percent or 35 percent house advantage, no longer is that gambler going to be motivated to participate.

E-mail Dover Post Doug Denison at doug.denison@doverpost.com