Betting Giants Face Hurdles in DC Expansion
Sports betting in Washington, DC is poised for a dramatic shift, with major players BetMGM and Caesars Sportsbook set to ramp up their presence. However, the journey has been anything but smooth. Originally scheduled to expand their offerings on Monday, 15 July, these plans hit a snag as Mayor Muriel Bowser has yet to sign the necessary budget bill.
The delay has already had tangible impacts. BetMGM was forced to cancel its planned celebration at Nationals Park, underlining the ripple effects of the holdup. Currently, FanDuel, in partnership with the DC Lottery, remains the lone sports betting platform available to enthusiasts in the district.
The Rocky Road to DC's New Betting Landscape
The DC Council granted final approval to the FY 2025 budget on 25 June, with the aim for it to take effect on 15 July. Despite this, the mayor's signature remains elusive, holding up the introduction of important new changes in the sports betting landscape.
The district's approach to sports betting hasn't been without controversy. Back in January 2019, the DC Council approved a single-provider digital market, bypassing the competitive bid process. This decision expanded the contract of lottery vendor Intralot to include sports wagering, launching the much-criticized GamBetDC platform. Issues such as limited betting markets and technical difficulties plagued GamBetDC, and its revenue significantly underperformed.
FanDuel’s arrival onto the scene marked a stark contrast. In the first month of operations, FanDuel's online sports betting handle surged by 450% compared to the same period under GamBetDC. May 2023 saw FanDuel generating $4.9 million in revenue, dwarfing GamBetDC’s $711,282. The city notably benefits by taking 40% of the revenue from lottery-backed wagering partners, making FanDuel’s success a boon for district coffers.
Intralot's Contract Ends; New Licensing Framework Introduced
With Intralot's contract expiring on 15 July, the city also transitioned to a new licensing framework. One of the most significant changes is the introduction of Type C licenses. These licenses are valid for five years and come with a hefty price tag: $2 million upfront and an annual renewal fee of $1 million. Licensees face a 30% tax rate.
A notable feature of the new law is allowing operators to partner not just with venues but with franchises, providing them with greater flexibility and potentially more lucrative opportunities. For instance, FanDuel's market access stems from its partnership with Audi Field. This alignment has its benefits, such as a lower 20% tax rate compared to the standard 30%.
BetMGM and Caesars Sportsbook, on the other hand, hold Class A licenses. These licenses permit them to offer digital platforms within a two-block exclusion zone around their respective venues—Nationals Park for BetMGM and Capital One Arena for Caesars. Caesars' partnership with Capital One Arena dates back to July 2020, while BetMGM kicked off its Nationals Park operations in June 2021. FanDuel also has a physical presence, having launched its retail sportsbook at Audi Field in July 2022.
Awaiting the Mayor's Signature
As of now, the expansion of sports betting in Washington, DC remains in a state of limbo, pending Mayor Bowser’s approval of the budget bill. This scenario underscores the often complex interplay between legislation, business interests, and public policy in the evolving world of sports wagering. For the many fans and bettors in the district, all eyes are on the mayor’s office as they await the green light for a more expansive betting landscape.
Time will tell how these changes will play out, but one thing is clear: Washington, DC's sports betting scene is undergoing a transformation that could set the tone for other markets contemplating similar moves.