Expansion of Sports Betting Hinges on Budget Approval
Washington, DC — The future of sports betting in the nation’s capital is awaiting a crucial signature from Mayor Muriel Bowser, who has yet to authorize the necessary budget bill. Without this approval, prominent sports betting platforms like BetMGM and Caesars Sportsbook are unable to commence their expansion plans, setting back a much-anticipated launch scheduled for Monday, July 15.
Both BetMGM and Caesars Sportsbook aimed to broaden their influence in Washington, DC, capitalizing on the rapidly growing sports betting market. Unfortunately, due to the budget bill's delayed approval, BetMGM was forced to cancel its planned festivities at Nationals Park. Currently, FanDuel, in collaboration with the DC Lottery, remains the sole operational sports betting platform within the district.
The DC Council’s final approval of the FY 2025 budget on June 25 had set the stage for the bill to take effect by mid-July. The forthcoming law introduces a new class of sports betting licenses—Type C licenses, valid for five years at a substantial cost of $2 million, with an annual renewal fee of $1 million and a 30% tax rate for the licensees. These licenses offer operators the flexibility to partner with franchises, not just venues, intensifying competition and potentially driving revenue growth.
Despite DC Council's efforts to invigorate the sports betting sector, history reveals a rocky past. In January 2019, the council granted a single-provider digital market to lottery vendor Intralot through an uncompetitive bid process. This resulted in the inception of GamBetDC, a platform criticized for its limited betting options and technical glitches. These shortcomings led to the platform's underperformance, with GamBetDC failing to meet its revenue targets and generating only $711,282 in May 2023. Consequently, the DC Lottery decided to phase out GamBetDC in favor of a new contract with FanDuel.
The transition to FanDuel marked a notable turnaround, with the handle increasing by 450% in the first month of operations compared to the previous period under GamBetDC. FanDuel's success was embodied by its impressive $4.9 million revenue in May 2023. As the betting landscape evolved, DC's revenue strategy also improved, with the city taking a 40% share of earnings from lottery-backed wagering partners.
Notably, Intralot's contract expired on July 15, paving the way for a new era in DC’s sports betting arena. FanDuel has already established a stronghold through its strategic partnership with Audi Field, responding adeptly to the new licensing structure. This deal allows FanDuel to operate at a lower tax rate of 20% compared to the upcoming Type C licenses, providing it a competitive edge.
Meanwhile, BetMGM and Caesars Sportsbook, holders of Class A licenses, have cultivated a digital presence within a two-block exclusion zone surrounding their respective venues. Caesars, aligned with Capital One Arena, initiated its sportsbook operations back in July 2020, while BetMGM followed suit at Nationals Park in June 2021. FanDuel also entered the retail space at Audi Field in July 2022, reinforcing its market presence.
The sports betting landscape in Washington, DC continues to hang in a precarious balance. Expansion plans and new market entries are contingent upon the mayor's endorsement of the budget bill, a pivotal step to actualize the legislature’s vision. As stakeholders await the mayor’s decision, the anticipation underscores the high stakes involved in the burgeoning sports betting industry within the district.