Expanding the Sports Betting Landscape in Washington, DC
Washington, DC prepares to witness a significant transformation in its sports betting landscape as two major platforms, BetMGM and Caesars Sportsbook, gear up to expand their services across the city. Originally set to begin on Monday, 15 July, this development, however, is contingent upon the signature of Mayor Muriel Bowser on the necessary budget bill.
The much-anticipated approval of the budget has seen some delays, forcing BetMGM to put off its planned celebration at Nationals Park. Despite this setback, FanDuel, in partnership with the DC Lottery, remains the sole active sports betting platform for enthusiasts in the capital as of Monday night.
The DC Council made strides toward the new fiscal year by giving final approval to the FY 2025 budget on 25 June, with an effective date slated for 15 July. The sports betting sector in Washington, DC, has evolved vastly since January 2019, when the DC Council initially approved a single-provider digital market without undergoing a competitive bidding process.
The contract awarded to Intralot, the city's lottery vendor, came with an expansion to include sports wagering. Despite the ambitious scope, Intralot’s GamBetDC platform came under fire due to its limited betting options and technical issues. Consequently, the platform underperformed, failing to meet its revenue targets.
In a decisive move, the DC Lottery opted to shut down GamBetDC following a lucrative new contract with FanDuel. The contrasting outcomes were evident immediately, as FanDuel's online sports betting operation saw a 450% increase in handle during its first month, compared to the same period under GamBetDC. To put this in perspective, FanDuel generated a staggering $4.9 million in revenue in May 2023, while GamBetDC's revenue in the same month was a mere $711,282.
For the city, this transition translates into a significant financial benefit. Through its revenue agreements with lottery-backed wagering partners, the city secures a 40% share of the earnings. In the wake of these changes, Intralot’s contract officially expired on 15 July.
New Licensing Changes and Opportunities
Another notable shift in the DC sports betting framework is the introduction of Type C licenses. These licenses, valid for five years, come at a cost of $2 million with an annual renewal fee of $1 million. Licensees under this category will navigate a 30% tax rate. Additionally, the new regulations open up partnerships with franchises, rather than being limited to venues alone.
FanDuel's market access was facilitated through a partnership with Audi Field, allowing it to operate at a reduced tax rate of 20%. In contrast, BetMGM and Caesars Sportsbook hold Class A licenses, which grant them the privilege of offering digital platforms within a two-block exclusion zone around their respective venues, Nationals Park and Capital One Arena. Caesars Sportsbook made a pioneering move by partnering with Capital One Arena and opening its sportsbook in July 2020, followed by BetMGM's launch at Nationals Park in June 2021, and FanDuel’s retail presence at Audi Field a year later in July 2022.
Amid the ongoing developments, the sports betting sector in Washington, DC, is awaiting the mayor’s approval of the budget bill, which will definitively set these changes into motion. This period marks a pivotal moment for the city’s betting landscape, poised for a broadened horizon with new players and enhanced opportunities.