Two major sports betting platforms, BetMGM and Caesars Sportsbook, were preparing to significantly expand their presence across Washington, DC, poised to launch their operations on Monday, July 15. Yet, the effort has encountered a snag as Mayor Muriel Bowser has yet to sign the essential budget bill, creating a ripple effect across the city's burgeoning sports betting market.
The delay in the budget bill's approval put BetMGM on the backfoot, forcing it to cancel its celebratory event at Nationals Park. While fans awaited the launch, the cancellation underscored the fragile intersection of sports betting and local politics.
Meanwhile, FanDuel, in collaboration with the DC Lottery, remains the sole available platform serving DC’s sports betting enthusiasts. This monopoly continues as the intricacies of the budget and administrative processes unfold. Notably, the DC Council had given final approval to the FY 2025 budget on June 25, with an aim of enacting it by July 15.
Historical Context & Challenges
The roots of DC’s sports betting framework date back to January 2019. The DC Council approved a single-provider digital market without going through a competitive bid process. The incumbent lottery vendor, Intralot, saw its contract expanded to handle sports wagering through its GamBetDC platform. However, GamBetDC faced severe criticism for its limited betting markets and technical problems, making it fall short of revenue expectations. By the time GamBetDC was shuttered, it had proven unable to capture the excitement and wallets of sports bettors as originally envisioned.
The decision to close GamBetDC was made easier by the remarkable success of FanDuel’s entry into the market. Within a month of FanDuel commencing online operations, the betting handle surged by an astonishing 450% compared to the same period under GamBetDC. The financial gap was clear: FanDuel generated $4.9 million in revenue in May 2023, dwarfing GamBetDC’s $711,282. Given that the city secured 40% of the revenue from lottery-backed wagering partners, this shift had significant fiscal implications for Washington, DC.
Evolution and Strategic Moves
With Intralot’s contract expiring on July 15, DC introduced new conditions designed to recalibrate the sports betting landscape. Under the new law, Type C licenses have been introduced, valid for five years at an initial cost of $2 million and an annual renewal fee of $1 million. These licensees will also pay a 30% tax rate, aligning DC more closely with industry standards while aiming to generate substantial revenue for public projects.
Furthermore, the restructured system permits operators to partner with sports franchises, not just venues. This change opens new avenues for strategic alliances, allowing operators like FanDuel to continue their market ascendancy through its partnership with Audi Field. Benefiting from this partnership, FanDuel enjoys a competitive 20% tax rate.
BetMGM and Caesars Sportsbook hold Class A licenses, offering them substantial leeway within their two-block exclusion zones around their respective venues, Nationals Park and Capital One Arena. Caesars partnered with Capital One Arena and inaugurated its sportsbook in July 2020, while BetMGM launched at Nationals Park in June 2021. FanDuel cemented its retail presence at Audi Field in July 2022, completing the trio of major operators seeking to dominate the capital's betting landscape.
Awaiting the Mayor’s Signature
As the clock ticks, the expansive plans of BetMGM and Caesars hang in the balance, waiting for the mayor's crucial signature on the budget bill. Amid this complexity, one thing is clear: Washington, DC's sports betting landscape is on the cusp of transformation. As regulatory frameworks evolve and new operators prepare to stake their claims, the city continues to cash in on the rich potential of this high-stakes arena.