Betting Expansion in DC Hits Snag
The Washington, DC sports betting landscape was poised for a significant change with the anticipated expansion of two major platforms, BetMGM and Caesars Sportsbook, starting Monday, July 15. However, bureaucratic delays have thrown a wrench into these plans.
Despite the DC Council's final approval of the FY 2025 budget on June 25, Mayor Muriel Bowser has yet to sign the necessary budget bill. This delayed approval has already caused disruptions, including the cancellation of BetMGM's planned celebration at Nationals Park.
In the meantime, FanDuel, in partnership with the DC Lottery, remains the only available sports betting platform for enthusiasts in DC as of Monday night. The city had initially approved a single-provider digital market back in January 2019, without engaging in a competitive bid process, expanding the contract of lottery vendor Intralot to include sports wagering. Unfortunately, Intralot’s GamBetDC platform faced criticism for its limited betting markets and technical issues, and it significantly underperformed in revenue generation.
Following these setbacks, the lottery decided to shut down GamBetDC after securing a new contract with FanDuel. The changeover proved beneficial almost immediately; the handle shot up 450% in FanDuel's initial month of operation compared to the same period under GamBetDC. In financial terms, FanDuel generated an impressive $4.9 million in revenue in May 2023, a stark contrast to GamBetDC’s $711,282 in the same month.
The city benefits significantly by taking 40% of the revenue from lottery-backed wagering partners. With Intralot’s contract expiring on July 15, the new regulations introduce Type C licenses, which are valid for five years and cost $2 million, with an annual renewal fee of $1 million. These licensees are subject to a 30% tax rate. Notably, the new law allows operators to partner with franchises, not just venues.
FanDuel has leveraged this flexibility by partnering with Audi Field, securing its market access and enjoying a reduced 20% tax rate as Audi Field’s partner. In contrast, BetMGM and Caesars Sportsbook hold Class A licenses, enabling them to offer digital platforms within a two-block exclusion zone around their respective venues, Nationals Park and Capital One Arena. Caesars partnered with Capital One Arena and launched its sportsbook back in July 2020, while BetMGM began operations at Nationals Park in June 2021. FanDuel, meanwhile, opened its retail presence at Audi Field in July 2022.
The latest developments suggest a dynamic shift in DC's sports betting environment, pending the mayor’s approval of the budget bill. Enthusiasts and operators alike are on edge as they await further action from Mayor Bowser. Without her signature, the expansion plans remain in limbo, stalling what could be transformative changes in the region's sports betting landscape.
It's evident that the city administration's next steps will be crucial in defining the future framework and viability of sports wagering in Washington, DC. Anticipation runs high as both stakeholders and fans alike look for concerted efforts to streamline operations and generate higher revenues.