Markell signed the bill into law Thursday.
The First State should have sports betting running in three months and table games such as poker, blackjack, craps and roulette, in play in no more than six months, said officials.
Sports betting would be done in a parlay lottery system. The sports lottery is key to Markell's plan to address a projected shortfall of more than $600 million for the coming fiscal year.
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The deal went through in part because of concessions made for the established racing tracks in the state.
“My administration is looking forward to working with our business partners here at Delaware Park and at Dover Downs and Harrington to make the Delaware sports lottery as successful as possible,” Markell said.
Sports betting could face legal challenges by professional sports leagues.
Delaware became the only state east of the Mississippi River to allow betting on sports. The First State is one of only four states, along with Nevada, Montana and Oregon, grandfathered into allowing sports betting despite a 1992 federal law that banned sports gambling.