House committee releases bill to require prepaid-card funding for iLottery; supporters say it protects small retailers

The House and Government Connections Committee voted to release House Bill 335, a measure that would require internet lottery accounts in Delaware to be funded with prepaid cards purchased at licensed retail locations, after a committee hearing that featured testimony from the bill’s sponsor, retailers and the Delaware Lottery.

Representative Bill Bush, the bill sponsor, said HB335 is intended to carry forward the original 2012 legislative intent that online play remain tied to in‑store prepaid-card purchases so that small retailers retain the customer foot traffic and commissions they rely on. "By creating a world where you don't have to go into these stores, my concern is we are gonna really hurt our small businesses out there," Bush said, urging regulatory safeguards to preserve retailer benefits.

The bill prompted sharply different views from stakeholders. A Delaware Lottery official testified in opposition, arguing the agency’s mission is to "maximize proceeds to the general fund" and that a prepaid-card‑only model is "misaligned with modern consumer behavior." The official told the committee that a model limited to in‑store prepaid cards "does not grow the market. It actually shrinks it," and listed unresolved technical questions — including how prepaid cards would be defined, produced, distributed and integrated with existing systems, and how players would withdraw winnings.

Industry and retailer witnesses largely supported the measure. Lloyd Bolter, general manager for Delaware operations at Scientific Games, said the iLottery program was designed "with a retail first framework" and cited data showing affiliate retailers experienced higher year‑over‑year growth than nonparticipating stores. Michael Halloran of the Midland Petroleum Distributors Association said the bill would reinforce the General Assembly’s 2012 intent and that regulations should ensure prepaid cards purchased at retail remain the primary funding mechanism.

Multiple small-business owners described lottery sales as a material portion of their revenue. Suraj Kumar, who owns a Shell station in New Castle, said lottery sales account for about 20% of his business and that losing even a fraction of that traffic would strain his ability to stay open. Julie Monroe Wenger of the Delaware Food Industry Council noted in remote testimony that retailers have generated more than $6 billion for Delaware’s general fund since the lottery’s inception.

Drew Svitko, executive director of the Pennsylvania Lottery, spoke remotely about experiences in other states with iLottery. He said Pennsylvania records roughly $5 billion in retail sales and about $900 million in online sales and cautioned that online sales often carry lower profit margins than traditional retail sales.

After public and agency testimony, Representative Chacocha moved to release HB335 from committee; Representative Cook seconded the motion. The committee conducted a roll-call vote and the chair announced the bill was released and will be reported on the legislative website. No amendments or changes to the bill text were recorded at the hearing.

The next procedural step is the bill’s posting on the General Assembly website and the scheduling of future floor or committee action according to legislative rules.