Betting Landscape in Washington, DC Awaits Budget Bill Approval
Washington, DC's sports betting scene was poised for significant expansion as major platforms BetMGM and Caesars Sportsbook prepared to establish a stronger presence starting Monday, July 15. However, the progression hangs in the balance as Mayor Muriel Bowser has not yet signed the necessary budget bill, causing unforeseen delays.
This delay notably led BetMGM to cancel its much-anticipated celebration at Nationals Park, a move that underscores the gravity of the situation. Meanwhile, FanDuel—operating in partnership with the DC Lottery—remains the sole available sports betting platform for enthusiasts in the nation's capital as of Monday night, offering a sense of continuity amidst uncertainty.
Budget Approval Holds the Key
The DC Council gave its final nod to the FY 2025 budget on June 25, with plans for it to take effect on July 15. Yet, without the mayor's signature, the planned expansions of BetMGM and Caesars Sportsbook remain in limbo. This budget is crucial as it paves the way for these expansions, alongside other regulatory updates in the DC sports betting ecosystem.
Delving into the history, in January 2019, the DC Council had endorsed a single-provider digital market without a competitive bid process. The contract with lottery vendor Intralot was expanded to include sports wagering, which led to the inception of the GamBetDC platform. Despite its initial promise, GamBetDC faced heavy criticism due to its limited betting markets and technical glitches, ultimately falling short of its revenue projections.
FanDuel's Dominance
In a turnaround, the DC Lottery inked a new deal with FanDuel, leading to the phase-out of GamBetDC. The contrast in performance was stark: FanDuel's initial month saw a 450% increase in handle compared to the same period under GamBetDC. Further cementing its success, FanDuel generated $4.9 million in revenue in May 2023, dwarfing GamBetDC's $711,282 for the same month. The city stands to benefit significantly, as it receives 40% of the revenue from lottery-backed wagering partners.
The expired contract of Intralot on July 15 marks a significant shift, with the new law introducing Type C licenses. These licenses, valid for five years, cost $2 million with an annual renewal fee of $1 million, and come with a 30% tax rate. This regulatory update allows operators to partner not only with venues but also with franchises, broadening the scope for future collaborations.
Strategic Partnerships and Tax Rates
FanDuel's market access is bolstered by its partnership with Audi Field, a move that ensures a 20% tax rate for the company due to its alignment as Audi Field’s partner, a more favorable rate compared to the Type C licenses.
On the other hand, BetMGM and Caesars Sportsbook hold Class A licenses, permitting them to offer digital platforms within a two-block exclusion zone around their respective venues, Nationals Park and Capital One Arena. This geographic restriction aims to balance market competition, offering unique advantages to these leading platforms. Notably, Caesars launched its sportsbook within Capital One Arena in July 2020, while BetMGM commenced its operations at Nationals Park in June 2021. FanDuel also marked its presence with a retail launch at Audi Field in July 2022.
Awaiting the Mayor's Decision
The sports betting landscape in Washington, DC stands at a crucial juncture, with all eyes on Mayor Muriel Bowser's impending decision to sign the budget bill. The approval will not only sanction the expansions of BetMGM and Caesars Sportsbook but will also solidify the regulatory framework under which these operators will function.
As fans and operators alike wait with bated breath, the future of sports betting in the capital hinges on this pivotal budget bill. Once approved, it promises to usher in a new era of competitive and diverse sports wagering options, enriching the experience for bettors in Washington, DC.