Two major sports betting platforms, BetMGM and Caesars Sportsbook, were poised to make significant expansions across Washington, DC, starting Monday, 15 July. This expansion, however, faces an unexpected hurdle as Mayor Muriel Bowser has yet to sign the necessary budget bill.
A Significant Delay
The delayed approval of the budget bill has led to immediate consequences, with BetMGM being forced to cancel its planned celebration at Nationals Park. This event was set to mark their broader engagement within the city, but now, the uncertainty leaves a palpable void for sports betting enthusiasts in the nation's capital.
An interesting dynamic has unfolded with FanDuel being the sole sports betting platform available in DC as of Monday night. This was facilitated through their partnership with the DC Lottery, which has been a critical lifeline amidst the current budgetary limbo.
Background and Context
On 25 June, the DC Council gave final approval to the FY 2025 budget. The budget was scheduled to go into effect on 15 July, anticipating a seamless transition for the sports betting industry. However, the delay in the Mayor’s signature is creating ripples across the board.
To understand the present scenario, it’s vital to recall the decisions made in January 2019 when the DC Council approved a single-provider digital market without engaging in a competitive bid process. This non-competitive decision extended the contract of lottery vendor Intralot to include sports wagering, resulting in the creation of the GamBetDC platform.
The Rise and Fall of GamBetDC
Intralot’s GamBetDC, however, faced considerable criticism for its limited betting markets and frequent technical issues. Despite its promises, GamBetDC fell short of its revenue projections, finally leading to its shutdown following a new contract with FanDuel. The lackluster performance of GamBetDC saw an immediate turnabout as FanDuel entered the scene, driving a 450% increase in the handle during its initial month of online operations compared to the same period under GamBetDC.
Financial figures further paint a clear picture—FanDuel generated a substantial $4.9 million in revenue in May 2023, overshadowing GamBetDC’s $711,282 in the same month. Such disparities underline the market's reaction towards a more reliable and expansive betting platform.
Financial Implications for the City
The city of Washington, DC, reaps significant benefits from these operations by taking 40% of the revenue from lottery-backed wagering partners. Despite Intralot's contract expiry on 15 July, the groundwork laid by FanDuel ensures continued revenue flow. New laws introducing Type C licenses signal fresh opportunities; these licenses, valid for five years, come with a hefty price tag of $2 million and an annual renewal fee of $1 million, accompanied by a 30% tax rate.
Type C licenses are set to expand the operational scope, allowing operators to partner with franchises, not just venues. This is a marked shift from the previous norm and reflects the evolving business landscape in DC’s betting world.
Existing Partnerships and Classifications
FanDuel’s market access is driven by its strategic partnership with Audi Field, an alignment that offers it a more favorable 20% tax rate. On the other hand, BetMGM and Caesars Sportsbook hold Class A licenses, granting them the ability to operate digital platforms within a two-block exclusion zone around their respective venues—Nationals Park for BetMGM and Capital One Arena for Caesars.
Caesars set a precedent by opening its sportsbook in Capital One Arena as early as July 2020, followed by BetMGM’s entry in June 2021 at Nationals Park. FanDuel then sealed its retail presence at Audi Field in July 2022, creating a competitive yet dynamic betting environment in DC.
As Washington DC’s sports betting scene awaits the Mayor’s approval of the budget bill, the unfolding changes speak volumes about the industry’s future trajectory. BetMGM and Caesars are set to bolster their city presence, hoping to soon overcome these bureaucratic delays. Meanwhile, FanDuel’s strong footing through its partnership and revamped offerings continues to set a high bar for the market.