The Washington, DC sports betting landscape is on the brink of significant transformation, but the journey has been far from smooth. As of Monday, July 15, BetMGM and Caesars Sportsbook were anticipated to gain a stronger foothold in the nation’s capital. However, Mayor Muriel Bowser has yet to put pen to paper on the crucial budget bill, creating a ripple effect across the DC sports betting scene.
Implications of the Delayed Budget Approval
Without the approval of the budget bill, BetMGM had to call off its much-anticipated celebration at Nationals Park. This delay leaves FanDuel, in partnership with the DC Lottery, as the sole operating sports betting platform in DC, at least for the time being. The budget bill, granted final approval by the DC Council on June 25, was slated to come into effect on July 15, but the delay puts this timeline in jeopardy.
New Era for DC Sports Betting: From Monopoly to Competition
The journey to this point involved a controversial decision made in January 2019 by the DC Council to approve a single-provider digital market without a competitive bidding process. Lottery vendor Intralot was tasked with managing this exclusive monopoly, expanding its duties to include sports wagering. However, its GamBetDC platform quickly garnered criticism for limited betting options and technical shortcomings, ultimately failing to deliver on its revenue promises. In reaction to these issues, and under a new contract with FanDuel, the city’s lottery officially decided to pull the plug on GamBetDC.
FanDuel’s Meteoric Rise
The shift to FanDuel has proven fruitful. The platform saw a staggering 450% increase in betting handle in its first month compared to GamBetDC’s performance during the same period. In May 2023 alone, FanDuel generated $4.9 million in revenue, dwarfing GamBetDC’s $711,282. This shift substantially benefits the city, as it receives a substantial 40% of revenue from lottery-supported wagering partners.
Licensing and Market Dynamics
On an administrative note, Intralot's contract expired on July 15, paving the way for new operational structures, including the introduction of Type C licenses. These licenses, valid for five years, come with a hefty price tag: a $2 million initial fee and an annual renewal fee of $1 million. Licensees will be subjected to a 30% tax rate. A significant change is that betting operators can now collaborate with sports franchises, not just specific venues.
FanDuel has secured its position via a strategic partnership with Audi Field, allowing it to operate under a more favorable 20% tax rate—an advantage in a competitive space. BetMGM and Caesars Sportsbook both hold Class A licenses, permitting them to offer digital platforms within a two-block radius of their respective venues, Nationals Park and Capital One Arena. Caesars made its mark by opening its sportsbook at Capital One Arena in July 2020, while BetMGM set up operations at Nationals Park in June 2021. Not to be left behind, FanDuel established its retail presence at Audi Field in July 2022.
Awaiting Mayoral Approval
The future of sports betting in Washington, DC hinges on Mayor Bowser's approval of the budget bill. This decision will determine the operational dynamics within the city, impacting both bettors and operators alike. Until the ink dries on that crucial document, enthusiasm and anticipation remain high, underscoring the keen interest in this evolving market.
The stakes are high as DC continues to carve out its identity as a premier sports betting destination. With established players like FanDuel dominating early statistics and new competitors waiting in the wings, the approval of the budget bill promises to usher in a new chapter for sports enthusiasts and operators. The next steps taken by the DC government will be pivotal in shaping the future of this burgeoning industry.