Two major sports betting platforms, BetMGM and Caesars Sportsbook, were poised to increase their reach within Washington, DC, starting Monday, 15 July. However, this awaited expansion faced a significant hurdle as Mayor Muriel Bowser had yet to sign the necessary budget bill, causing an unexpected delay amid the city's evolving sports betting landscape.
BetMGM specifically had planned a grand celebration at Nationals Park to mark its heightened presence in the capital city's market. The delayed approval of the budget bill, however, forced the cancellation of these festivities. With the uncertainty surrounding the mayor's approval, sports enthusiasts in DC find themselves constrained in their choices.
Monopoly in the Market
As the clock struck Monday night, FanDuel, in collaboration with the DC Lottery, remained the sole operating sports betting platform available for fans. This scenario marks a stark contrast to the anticipated competitive environment following the DC Council's approval of the FY 2025 budget on 25 June, which was intended to take effect on 15 July.
The current landscape is a result of a decision made in January 2019 when the DC Council approved a single-provider digital market without a competitive bid process. This move granted an expanded contract to lottery vendor Intralot, including provisions for sports wagering. The resulting GamBetDC platform, however, fell short of expectations due to limited betting markets and technical issues.
Transition to FanDuel
As a consequence of GamBetDC's inability to meet revenue projections, it has been phased out in favor of a new contract with FanDuel. The transition has already shown promising results, with a 450% increase in handle during FanDuel's first month of operation compared to GamBetDC's performance over the same period. In May 2023 alone, FanDuel generated an impressive $4.9 million in revenue, dwarfing GamBetDC's $711,282.
These figures are not just impressive for the operators; they also benefit the city, which takes a 40% cut of the revenue from lottery-backed wagering partners. The higher revenue generation under FanDuel's operation thus promises a more substantial financial boon for Washington, DC.
Licensing and Market Dynamics
The sports betting sector in DC is governed by a structured licensing system. With the expiration of Intralot's contract on 15 July, the new law introduces Type C licenses. These licenses, valid for five years, are priced at $2 million with a $1 million annual renewal fee and come with a 30% tax rate. Operators under these licenses can now partner with sports franchises, not just venues, broadening their operational scope.
In contrast, FanDuel’s operational model aligns with its partnership with Audi Field, enabling the company to benefit from a slightly lower tax rate of 20% as a franchise partner. Meanwhile, BetMGM and Caesars Sportsbook hold Class A licenses, allowing them to offer digital platforms within a two-block exclusion zone around their respective venues, Nationals Park and Capital One Arena.
Established Presence in DC
Caesars Sportsbook has an established presence in DC, having opened its sportsbook at Capital One Arena in July 2020. BetMGM followed suit by launching at Nationals Park in June 2021, and FanDuel further expanded the city's sports betting options with the launch of its retail presence at Audi Field in July 2022.
The evolution of DC's sports betting market hinges on various regulatory and logistical aspects, culminating in the waiting game for the mayor's approval of the budget bill. This development is crucial for DC's sports betting enthusiasts who eagerly anticipate a diversified and competitive market. Despite the current monopolistic scenario with FanDuel being the only option, the groundwork has been laid for a potentially flourishing and varied sports betting environment, pending regulatory endorsement.