Expansion of Betting Platforms Faces Delays in DC
The sports betting landscape in Washington, DC is currently in a state of flux, as two major betting platforms, BetMGM and Caesars Sportsbook, are poised to expand their presence starting Monday, 15 July. However, significant hurdles remain.
Awaiting Mayor Bowser’s Signature
The crux of the issue lies with the yet-to-be-signed budget bill by Mayor Muriel Bowser. The pending approval has cast uncertainty on the operations of these betting giants, prompting BetMGM to cancel its planned celebration at Nationals Park. The delayed signature has broader implications for DC's burgeoning sports betting market.
FanDuel Takes the Lead
Amid this uncertainty, FanDuel continues to maintain its stronghold in the market through its strategic partnership with the DC Lottery. As of Monday night, it remains the sole platform available to sports betting enthusiasts in the capital. The DC Council's final approval of the FY 2025 budget on 25 June had set a clear trajectory for the sector, with the budget originally set to take effect on 15 July.
In January 2019, the DC Council took a controversial step by approving a single-provider digital market without a competitive bid process, expanding the lottery vendor Intralot’s contract to include sports wagering. This decision laid the foundation for Intralot’s GamBetDC platform, although the platform faced criticism for its limited betting markets and technical issues.
Performance Disparities
The disparities in performance and revenue between GamBetDC and FanDuel are stark. Following the tumultuous period with GamBetDC, which did not meet its revenue promises, the lottery decided to shut down the platform after securing a new contract with FanDuel. Under FanDuel, the market saw a significant upturn; the betting handle witnessed a skyrocketing 450% increase in the initial month compared to the same period under GamBetDC. FanDuel reported $4.9 million in revenue in May 2023, dwarfing GamBetDC’s revenue of $711,282 for the same month.
The city enjoys a substantial 40% of the revenue generated by lottery-backed wagering partners like FanDuel, marking a lucrative benefit for DC's coffers. Notably, Intralot's contract officially expired on 15 July, further solidifying FanDuel's dominance in the market.
New Licensing Framework
With the new budget law, a fresh licensing framework has been introduced, unveiling Type C licenses. These licenses, valid for five years, come with a hefty price tag of $2 million and an annual renewal fee of $1 million. Additionally, license holders are subject to a 30% tax rate, reflecting the high stakes involved in the DC market.
A noteworthy change in the new law allows operators to partner with franchises in addition to venues. FanDuel has leveraged this to its advantage by aligning itself with Audi Field, securing market access and benefiting from a reduced tax rate of 20%.
Class A Licensing and Venues
Meanwhile, BetMGM and Caesars Sportsbook hold Class A licenses, allowing them to operate digital platforms within a two-block exclusion zone around their respective venues, Nationals Park and Capital One Arena. Caesars, for example, opened its sportsbook at Capital One Arena back in July 2020, while BetMGM launched its operation at Nationals Park in June 2021. FanDuel also established a retail presence at Audi Field in July 2022, broadening its footprint in the region.
As the sports betting narrative in Washington, DC unfolds, the next chapter hinges on the mayor’s approval of the budget bill, a critical step that will determine the future operations of BetMGM, Caesars Sportsbook, and the continued dominance of FanDuel. The vibrant and dynamic betting landscape awaits further developments, promising an engaging and competitive environment for both operators and sports enthusiasts alike.