Expansion Plans on Hold: The Current State of Sports Betting in Washington, DC
The sports betting landscape in Washington, DC was poised for a significant shift as BetMGM and Caesars Sportsbook geared up to extend their footprint in the nation's capital starting Monday, July 15. However, the much-anticipated expansion has faced an unexpected roadblock.
Budget Bill Delay Stalls Celebrations
Mayor Muriel Bowser has yet to endorse the crucial budget bill, leading to the postponement of various planned events. As a direct consequence, BetMGM had to cancel its scheduled celebration at Nationals Park, leaving many enthusiasts and stakeholders in limbo.
Currently, FanDuel, in collaboration with the DC Lottery, remains the sole available sports betting platform for avid bettors in DC. This comes after the DC Council gave its final nod to the FY 2025 budget on June 25, with an effective date set for July 15. Yet, the delay in the mayor's approval has created a ripple in the plans of multiple stakeholders.
Legacy and Transition
The journey of sports betting in DC has been intriguing. Back in January 2019, the DC Council sanctioned a single-provider digital market, notably bypassing a competitive bid process. This decision saw the extension of lottery vendor Intralot’s contract to include sports wagering. However, the rollout of the GamBetDC platform under Intralot was far from smooth, marred by limited betting markets and persistent technical glitches. Unsurprisingly, the platform failed to meet its revenue expectations.
Recognizing the shortcomings, the lottery decided to pull the plug on GamBetDC, paving the way for a fresh partnership with FanDuel. The results were immediate and profound. FanDuel saw a staggering 450% surge in handle during its initial month of operations compared to the same period under GamBetDC. To put things in perspective, FanDuel generated an impressive $4.9 million in revenue in May 2023, whereas GamBetDC lagged significantly behind with just $711,282 for the same month. The city, in turn, benefits handsomely, taking in 40% of the revenue from lottery-backed wagering partners.
Shifts in Licensing and Operations
As the landscape evolves, new regulations are being introduced. The expiration of Intralot's contract on July 15 has ushered in a new era with the introduction of Type C licenses. These new licenses, valid for five years, carry a hefty price tag of $2 million, with an annual renewal fee of $1 million. Moreover, licensees will be subject to a 30% tax rate.
A noteworthy change in the licensing regime is that operators can now partner with franchises and not just specific venues. For instance, FanDuel has secured its market access through a partnership with Audi Field, benefiting from a comparatively lower tax rate of 20% by aligning itself as a partner of Audi Field.
Meanwhile, BetMGM and Caesars Sportsbook hold Class A licenses, which provide them the privilege to offer digital platforms within a two-block exclusion zone around their respective venues, Nationals Park and Capital One Arena. It’s worth noting that Caesars opened its sportsbook at Capital One Arena in July 2020, while BetMGM commenced its operations at Nationals Park a year later in June 2021. FanDuel, on the other hand, launched its retail operations at Audi Field in July 2022.
Awaiting the Green Light
As of now, the future of sports betting expansion in Washington, DC remains in a state of anticipation, hinging on Mayor Bowser's endorsement of the budget bill. While the DC sports betting community waits with bated breath, FanDuel continues to enjoy its position as the exclusive platform available to bettors. The sooner the budget bill gains the mayor's signature, the quicker the anticipated expansions of BetMGM and Caesars Sportsbook can proceed, potentially transforming the betting landscape in DC for the better.