Expansion of Sports Betting in Washington, DC Hits a Snag
Washington, DC, has been on the cusp of a significant shakeup in its sports betting landscape. Two major platforms, BetMGM and Caesars Sportsbook, were poised to broaden their presence starting Monday, July 15. However, the city's move towards diversified betting options has collided with procedural delays.
Mayor Muriel Bowser has yet to sign the crucial budget bill, throwing a wrench into the works. The lack of a signed budget led BetMGM to cancel its planned celebration at Nationals Park. As of Monday night, FanDuel, in partnership with the DC Lottery, remains the sole active sports betting platform for enthusiasts in the capital.
The budget's journey has been a protracted one. The DC Council gave its final approval to the Fiscal Year 2025 budget on June 25, and it was scheduled to go into effect on July 15. The delay in mayoral sign-off is a setback for multiple stakeholders who had been bracing for a more competitive market. In January 2019, the DC Council took a controversial step by approving a single-provider digital market without resorting to a competitive bid process, a decision that expanded the lottery vendor Intralot's contract to include sports wagering.
However, Intralot's GamBetDC platform faced widespread criticism for its limited betting markets and technical problems and ultimately failed to live up to its revenue promises. The platform's struggles prompted the lottery to terminate GamBetDC following a new contract arrangement with FanDuel. In a striking comparison, the handle skyrocketed by 450% in the first month of FanDuel's online sports betting operation compared to the same period under GamBetDC. FanDuel reported an impressive revenue of $4.9 million in May 2023, while GamBetDC managed to pull in a meager $711,282 for the same month.
FanDuel's financial success has proven beneficial for the city, which takes home 40% of the revenue from lottery-backed wagering partners. As Intralot’s contract expired on July 15, new legislation has now introduced Type C licenses. These licenses are valid for five years and come with a $2 million price tag, alongside an annual renewal fee of $1 million. Licensees will be taxed at a 30% rate under the new law.
The regulatory changes extend beyond cost and duration. With the new framework, operators can now partner with sports franchises rather than just venues. FanDuel has leveraged this opportunity by aligning itself with Audi Field, allowing them to operate at a favorable 20% tax rate. By contrast, BetMGM and Caesars Sportsbook hold Class A licenses, which lets them offer digital platforms within a two-block exclusion zone around their respective venues—Nationals Park for BetMGM and Capital One Arena for Caesars. This is a noteworthy strategic advantage as localized betting options tend to drive higher engagement.
Caesars made its initial foray into the DC sports betting market by opening its sportsbook at Capital One Arena in July 2020. BetMGM followed suit, launching its operations at Nationals Park in June 2021. FanDuel then set up its retail presence at Audi Field in July 2022. The efforts of these big players are ultimately governed by the pending approval of the budget bill, determining when and how the new landscape will take effect.
With the future of sports betting in DC in limbo pending the mayor’s approval, the shift from a single-provider system to a diversified competitive market hangs in the balance. The impending developments promise to transform the dynamics and revenue streams within DC’s sports betting environment, setting the stage for a robust rivalry among top-tier operators.