Expansion of Sports Betting in Washington, DC Faces Setback Amid Budget Delays
The landscape of sports betting in Washington, DC, was poised for significant expansion as major platforms BetMGM and Caesars Sportsbook planned to extend their reach across the city starting Monday, 15 July. However, this expansion encountered a stumbling block due to a delay in the approval of a crucial budget bill by Mayor Muriel Bowser.
With the budget bill's approval in limbo, BetMGM was left with no choice but to cancel its scheduled celebration at Nationals Park. This delay has left sports enthusiasts with limited options, as FanDuel, in partnership with the DC Lottery, remains the sole operational sports betting platform in DC as of Monday night. The DC Council had given its final approval to the FY 2025 budget on 25 June, with the budget slated to go into effect on 15 July, adding to the urgency of the situation.
In a move dating back to January 2019, the DC Council had approved a single-provider digital market without engaging in a competitive bid process. This decision expanded the contract of lottery vendor Intralot to encompass sports wagering through its GamBetDC platform. However, GamBetDC was criticized for its limited betting markets and persistent technical issues, ultimately falling short of its revenue promises.
The launch of FanDuel's platform in DC marked a significant turnaround. Following a new contract with FanDuel, the lottery decided to shut down GamBetDC. The initial month of FanDuel's online sports betting operation saw the handle shoot up by an astounding 450% compared to the same period under GamBetDC. In May 2023, FanDuel generated $4.9 million in revenue, dwarfing GamBetDC's revenue of $711,282 during the same month.
The city's treasury stands to benefit significantly from this switch, as it takes 40% of the revenue from lottery-backed wagering partners. The landscape is further changing with the introduction of Type C licenses, valid for five years and costing $2 million with an annual renewal fee of $1 million. These licensees will be subjected to a 30% tax rate and will now have the option to partner with franchises, not just venues.
FanDuel’s market access in DC is a result of its partnership with Audi Field, allowing it to operate under a more favorable 20% tax rate. Meanwhile, BetMGM and Caesars Sportsbook hold Class A licenses, enabling them to offer digital platforms within a two-block exclusion zone around their respective venues, Nationals Park and Capital One Arena. While Caesars partnered with Capital One Arena and launched its sportsbook in July 2020, BetMGM began its operations at Nationals Park in June 2021. FanDuel, on the other hand, established its retail presence at Audi Field in July 2022.
As the sports betting scene in Washington, DC continues to evolve, all eyes are now on Mayor Bowser and the pending approval of the budget bill. Stakeholders and enthusiasts alike are eager to see whether this will pave the way for an expanded and more robust sports betting market in the capital.