Two major sports betting platforms, BetMGM and Caesars Sportsbook, were set to expand their presence across Washington, DC, starting Monday, 15 July. This expansion, however, has hit a roadblock as Mayor Muriel Bowser has yet to sign the necessary budget bill. The budget bill's delayed approval has already caused BetMGM to cancel its planned celebration at Nationals Park, according to a company representative.
As of Monday night, FanDuel, in partnership with the DC Lottery, remains the only available sports betting platform for enthusiasts in DC. This comes after the DC Council gave final approval to the FY 2025 budget on 25 June, which was scheduled to go into effect on 15 July. The budget includes a crucial amendment that could significantly alter the wagering landscape within the district.
A Shift in the Wagering Landscape
Back in January 2019, the DC Council had approved a single-provider digital market without engaging in a competitive bid process. They expanded the contract of lottery vendor Intralot to include sports wagering. However, Intralot’s GamBetDC platform faced considerable criticism for its limited betting markets and technical issues, falling short of its revenue promises. In April, the lottery decided to shut down GamBetDC following a new contract with FanDuel.
The result was a dramatic increase in betting activity. In the initial month of FanDuel's online sports betting operation, the handle shot up 450% compared to the same period under GamBetDC, generating $4.9 million in revenue in May 2023 versus GamBetDC’s $711,282. Revenue in this context is derived after subtracting player winnings from the total bets placed within the month. The city benefits significantly, taking 40% of the revenue from lottery-backed wagering partners. Though FanDuel will continue to be available throughout DC, it will no longer act as an Intralot subcontractor, given that Intralot's contract expired on 15 July.
Future Betting Operations and New Licensing
Under the amended law, the landscape for betting operators is set to change with the introduction of Type C licenses. These licenses, valid for five years, will cost $2 million with an annual renewal fee of $1 million. Licensees will pay a 30% tax rate, a significant shift aimed at making the market more competitive. Operators can now partner with franchises, not just venues, paving the way for other potential players like DraftKings and Fanatics who have expressed interest in DC.
FanDuel's current market access stems from its partnership with Audi Field. By aligning itself as Audi Field’s partner, FanDuel will pay a 20% tax rate, aligning it with other operators. This is a strategic move, especially compared to the 40% revenue cut it used to pay as an Intralot subcontractor. This strategic move enables FanDuel to have a more significant presence under more favorable tax conditions.
Class A Licenses and Retail Presence
Meanwhile, BetMGM and Caesars Sportsbook hold Class A licenses, allowing them to offer digital platforms within a two-block exclusion zone around their respective venues—Nationals Park and Capital One Arena. This stems from the original law that mandated operators to partner with one of four professional sports venues to offer wagering services.
Caesars spearheaded retail sportsbook operations in DC by partnering with Capital One Arena and opening its book in July 2020. BetMGM followed suit with its operation at Nationals Park in June 2021, and FanDuel launched its retail presence at Audi Field in July 2022. The expansion of these retail sports betting options, coupled with the new Type C licenses, points to a burgeoning market in the nation's capital.
In summary, the sports betting landscape in Washington, DC, is on the cusp of significant changes but remains in a state of flux pending the mayor's approval of the budget bill. The introduction of new licenses and the shift from a lottery-backed single-provider model to a competitive market presents a promising future for sports wagering in the district. Enthusiasts and operators alike await the next steps with bated breath, keenly observing Mayor Bowser for the final nod that could reshape the capital's betting dynamics.