Starting Monday, July 15, the sports betting landscape in Washington, DC, was poised for a significant transformation with the expansion of two major platforms, BetMGM and Caesars Sportsbook. However, this anticipated change hit a snag as Mayor Muriel Bowser had not yet signed the necessary budget bill, stalling the plans for a more competitive betting market.
The delayed approval of the budget bill directly impacted BetMGM's plans, forcing the company to cancel its planned celebration event at Nationals Park. Currently, sports betting enthusiasts in DC continue to rely on FanDuel, which operates in partnership with the DC Lottery. As of Monday night, it remains the only available sports betting platform in the capital city.
DC Council's Budget Approval
On June 25, the DC Council gave its final approval to the FY 2025 budget, which was scheduled to go into effect on July 15. This approval was crucial for the expansion plans of BetMGM and Caesars Sportsbook. The budget bill's passage is integral to enabling broader competition and introducing new dynamics into the sports betting sector in DC.
The journey to this point has been long and complex. In January 2019, the DC Council approved a single-provider digital market without opting for a competitive bid process. This decision resulted in the expansion of the lottery vendor Intralot's contract to include sports wagering, subsequently launching the GamBetDC platform.
Criticism and Transition
Despite initial optimism, GamBetDC faced substantial criticism over its limited betting markets and various technical issues. Revenue expectations fell short, leading to the DC Lottery's decision to shut down GamBetDC following a new contract with FanDuel. The impact of this transition was immediately evident, with the betting handle increasing by 450% in the initial month of FanDuel's online sports betting operation compared to the same period under GamBetDC.
In May 2023 alone, FanDuel generated $4.9 million in revenue, a stark contrast to GamBetDC's $711,282 in the same period. The shift not only highlights the competitive boost FanDuel brought but also the potential revenue benefits for the city, which takes a 40% cut of the revenue from lottery-backed wagering partners.
Licensing and Taxation Changes
With Intralot's contract expiry on July 15, new regulations and licensing structures are coming into play. The new law introduces Type C licenses, valid for five years, costing $2 million, with an annual renewal fee of $1 million. These licenses come with a 30% tax rate, offering operators the opportunity to partner with franchises, expanding beyond just venue partnerships.
FanDuel’s current market access stems from its partnership with Audi Field, through which it benefits from a 20% tax rate. On the other hand, BetMGM and Caesars Sportsbook hold Class A licenses. These licenses permit digital platform operations within a two-block exclusion zone around their respective venues — Nationals Park for BetMGM and Capital One Arena for Caesars.
Establishing Roots in DC
Caesars Sportsbook pioneered the retail sportsbook presence at Capital One Arena in July 2020, while BetMGM followed suit, launching its operation at Nationals Park in June 2021. FanDuel embarked on its retail journey at Audi Field in July 2022, further diversifying the market options for consumers in DC.
The collaboration with Audi Field allowed FanDuel to capture a significant market share, emphasizing the strategic advantages of tying sports betting operations to major sports venues. This strategy not only attracts a dedicated fanbase but also leverages the heavy foot traffic in these locations.
As the DC sports betting market awaits the mayor's approval of the budget bill, the anticipated expansions signal a pivotal shift towards a more competitive and dynamic betting environment. The integration of new platforms like BetMGM and Caesars Sportsbook, alongside established players like FanDuel, promises a revitalized and potentially more lucrative era for sports wagering in the nation’s capital.
Stakeholders, including bettors and operators, are keenly watching the developments, hopeful that Mayor Bowser's signature will catalyze the significant shifts that the budget bill promises to bring.