Two significant players in the sports betting industry, BetMGM and Caesars Sportsbook, are poised for an expansion in Washington, DC. The plans were set to commence on Monday, July 15, marking a pivotal moment in the district's gambling landscape. However, the necessary budget bill, which Mayor Muriel Bowser has yet to sign, is putting a damper on these ambitious goals.
The delay in the budget bill's approval has already caused disruptions, notably leading BetMGM to cancel its planned celebration at Nationals Park. As it stands, FanDuel, in partnership with the DC Lottery, remains the sole sports betting platform available to enthusiasts in the capital as of Monday night. This exclusivity stems from a broader context in the city's approach to sports wagering.
A Prolonged Journey
The journey toward this moment can be traced back to January 2019, when the DC Council approved a single-provider digital market without a competitive bid process. This decision expanded the contract of the lottery vendor, Intralot, to include sports wagering. However, Intralot’s GamBetDC platform faced considerable criticism for its limited betting markets and numerous technical issues, ultimately falling short of its revenue promises.
The city's lottery moved to shut down GamBetDC following a new contract with FanDuel. This transition proved immediately beneficial, with the betting handle experiencing a 450% increase in the first month of FanDuel's online sports betting operation compared to the same period under GamBetDC. In May 2023 alone, FanDuel generated $4.9 million in revenue, far outstripping GamBetDC's $711,282.
Financial Impacts
Washington, DC benefits significantly from this new arrangement, with the city taking 40% of the revenue from lottery-backed wagering partners. Intralot's contract expired on July 15, opening the door for new opportunities and regulations in the sports betting sector.
The introduction of Type C licenses is another noteworthy development. These licenses, designed to be valid for five years, cost $2 million with an annual renewal fee of $1 million and come with a 30% tax rate. Licensees can now partner with franchises, not just venues, reflecting a more versatile and inclusive approach to the partnership strategy in the sector.
FanDuel's market access is secured through its partnership with Audi Field, affording it a 20% tax rate by aligning itself as Audi Field’s partner. In contrast, BetMGM and Caesars Sportsbook hold Class A licenses, which allow them to offer digital platforms within a two-block exclusion zone around their respective venues, Nationals Park and Capital One Arena. Caesars, which opened its sportsbook in July 2020, and BetMGM, which launched operations at Nationals Park in June 2021, have established solid footholds in the industry.
Looking Forward
While FanDuel remains the only available platform as of now, the potential approval of the budget bill could rapidly change that landscape. The final approval of the FY 2025 budget by the DC Council on June 25 placed the bill on track for a July 15 effective date, yet the mayor's signature remains the missing piece of the puzzle. The sports betting industry in Washington, DC stands on the precipice of significant transformation, contingent on this critical administrative step.
"Any further delays could ripple through the industry,” observed an industry analyst. “Operators, bettors, and the city itself have high stakes in this legislative decision."
As the district awaits the mayor’s move, the shadow of past missteps with GamBetDC looms large, offering both cautionary tales and lessons for the new entrants. The transition marks a fresh chapter in the city's gambling narrative, underscoring the dynamic and often unpredictable nature of legislative impacts on the sports betting industry.