Two prominent sports betting platforms, BetMGM and Caesars Sportsbook, had been poised to significantly expand their presence in Washington, DC. However, their plans faced an unexpected delay. The expansion, initially set to commence on Monday, 15 July, has been put on hold due to the delayed approval of a crucial budget bill by Mayor Muriel Bowser. This delay has already impacted BetMGM, which had to cancel its planned celebration at Nationals Park.
Current Landscape of DC Sports Betting
For now, sports betting enthusiasts in Washington, DC only have one option: FanDuel, which operates in partnership with the DC Lottery. As of Monday night, FanDuel remains the sole available sports betting platform in the area.
The troubled history of sports betting in DC is well-documented, starting from January 2019 when the DC Council approved a single-provider digital market without a competitive bidding process. This decision led to the expansion of the contract of lottery vendor Intralot to include sports wagering, resulting in the launch of its GamBetDC platform. Unfortunately, GamBetDC faced significant criticism for its limited betting markets and technical issues, ultimately falling short of its revenue promises.
The move to FanDuel appears to be a turning point for DC's sports betting scene. The DC Lottery decided to shut down GamBetDC following a new contract with FanDuel. In the first month of FanDuel's online operation, the betting handle shot up by 450% compared to the same period under GamBetDC, generating $4.9 million in revenue in May 2023, compared to GamBetDC's $711,282 in the same month.
Financial Implications and New Regulations
The DC government benefits significantly from these sports betting operations, taking 40% of the revenue from lottery-backed wagering partners. However, GamBetDC’s underperformance and subsequent replacement mark a significant shift in the market dynamics. Intralot's contract officially expired on 15 July, leaving FanDuel to dominate the market in the days ahead.
Amid these changes, a noteworthy development is the introduction of Type C licenses under the new law. These licenses, valid for five years, cost $2 million with an annual renewal fee of $1 million and entail a 30% tax rate. Another key change allows operators to partner with franchises, not just venues, adding a layer of flexibility and potential revenue streams. FanDuel has strategically partnered with Audi Field to secure market access and benefits from a 20% tax rate by aligning itself as Audi Field’s partner.
The Competitive Arena
While FanDuel enjoys a current monopoly, rivals BetMGM and Caesars Sportsbook are waiting in the wings. BetMGM and Caesars Sportsbook both hold Class A licenses. These licenses permit them to offer digital platforms within a two-block exclusion zone around their respective venues, Nationals Park for BetMGM and Capital One Arena for Caesars.
Caesars has had a significant presence at Capital One Arena since July 2020, while BetMGM launched its operation at Nationals Park in June 2021. FanDuel, on the other hand, established its retail presence at Audi Field in July 2022.
Future Prospects
The DC Council's final approval of the FY 2025 budget on 25 June set the stage for these developments. The budget, slated to go into effect on 15 July, remains pending Mayor Bowser’s signature. This approval is crucial for the phased expansion of sports betting operations, with operators like BetMGM and Caesars Sportsbook eagerly awaiting the green light to intensify their footprint in Washington, DC.
As stakeholders and sports enthusiasts alike keep a close eye on the mayor's office, the evolving sports betting landscape in Washington, DC promises to be an intriguing space to watch. The introduction of new regulations, partnerships, and licensing structures are set to shape the future of sports wagering in the nation’s capital, laying the groundwork for a competitive and potentially lucrative market.