The sports betting landscape in Washington, DC is on the brink of significant changes as two major platforms, BetMGM and Caesars Sportsbook, prepared to expand their presence starting Monday, 15 July. Amidst the excitement, the rollout faces a crucial hurdle - the delayed approval of the necessary budget bill by Mayor Muriel Bowser.
A City in Waiting
The budget bill, which was supposed to pave the way for the expansion of these betting giants, has yet to be signed by Mayor Bowser. This delay has already had tangible repercussions. BetMGM, which had planned a celebration at Nationals Park, was forced to cancel its event due to this legislative bottleneck.
Meanwhile, FanDuel continues to be the only available sports betting platform in DC, thanks to its partnership with the DC Lottery. This monopoly remains intact as of Monday night, leaving sports betting enthusiasts with fewer options than anticipated.
Betting Market Dynamics
The DC Council gave its final approval to the FY 2025 budget on 25 June, with the budget set to go into effect on 15 July. This budget's provisions are crucial for BetMGM and Caesars Sportsbook as they hold Class A licenses. These licenses allow the offering of digital platforms within a two-block exclusion zone around their respective venues, Nationals Park and Capital One Arena.
Interestingly, FanDuel has carved out its market access through a partnership with Audi Field, paying a 20% tax rate by aligning itself as a partner rather than an independent operator. This strategic move has allowed FanDuel to sidestep some regulatory hurdles that BetMGM and Caesars have encountered.
Historical Context
The journey to this point has been eventful. In January 2019, the DC Council approved a single-provider digital market without a competitive bid process, awarding the contract to lottery vendor Intralot. This contract, expanded to include sports wagering, saw the introduction of Intralot’s GamBetDC platform. However, GamBetDC struggled with limited betting markets and technical issues, ultimately falling short of its revenue promises.
The DC Lottery opted to shut down GamBetDC after securing a new contract with FanDuel. The impact was immediate and striking; the handle increased by 450% in the initial month of FanDuel's online sports betting operation compared to the same period under GamBetDC. FanDuel generated $4.9 million in revenue in May 2023, a stark contrast to GamBetDC’s $711,282 for the same month. This underscores the effectiveness and popularity of FanDuel’s platform.
Future Licensing and Revenue
The expiration of Intralot's contract on 15 July aligns with the introduction of the new law, which includes Type C licenses. These licenses, valid for five years, will cost $2 million each, with an annual renewal fee of $1 million. Additionally, licensees are subjected to a 30% tax rate. This new framework also allows operators to partner with franchises, not just venues, thereby broadening opportunities for collaboration and market penetration.
For the city, the stakes are high. Washington, DC benefits significantly from the revenue generated through sports betting. The city takes 40% of the revenue from lottery-backed wagering partners, a figure not to be overlooked in the broader budgetary context.
A Pending Approval
For BetMGM and Caesars Sportsbook, the current waiting game hinges on Mayor Bowser’s approval of the budget bill. With the introduction of new licenses and partnerships that promise to reshape the betting landscape, both companies are poised to make significant inroads in the DC market. BetMGM launched its operation at Nationals Park in June 2021, while Caesars has been operational at Capital One Arena since July 2020. FanDuel also made its mark by launching its retail presence at Audi Field in July 2022.
The anticipation is palpable as stakeholders await the mayor's approval, which will undoubtedly unlock a new chapter in Washington DC’s sports betting saga. This evolving scenario highlights the intricate balance between regulatory frameworks and market dynamics in the thriving industry of sports betting.