Two major sports betting platforms, BetMGM and Caesars Sportsbook, were poised to expand their footprint across Washington, DC, starting Monday, 15 July. However, with Mayor Muriel Bowser yet to sign the crucial budget bill, their plans have hit a snag. This delay in the budget approval led to BetMGM calling off its much-anticipated celebration at Nationals Park.
FanDuel, which has cemented its partnership with the DC Lottery, currently stands as the sole sports betting platform available for enthusiasts in DC as of Monday night. This status quo presents a curious landscape, reflecting both the promise and pitfalls of the capital city’s evolving sports betting environment.
A History of Legislative Moves
In January 2019, the DC Council greenlighted a single-provider digital market without the process of competitive bidding. This decision expanded the lottery vendor Intralot's contract to cover sports wagering, marking a significant pivot towards embracing digital betting platforms. However, Intralot’s GamBetDC platform faced severe criticism for its limited betting markets and various technical issues, failing to meet the ambitious revenue promises set forth.
This scenario eventually led to the lottery’s decision to shut down GamBetDC, paving the way for a new contract with FanDuel. The results of this move were immediate and profound. The handle saw a staggering 450% increase in the initial month of FanDuel's online sports betting operations compared to the same period under GamBetDC. In May 2023 alone, FanDuel generated an impressive $4.9 million in revenue, while GamBetDC's figures lagged significantly at $711,282.
The city’s coffers benefited as well, with a 40% take of the revenue from lottery-backed wagering partners. Intralot's contract expired on 15 July, marking a significant milestone in the transition of DC’s sports betting landscape.
New Licensing and Revenue Implications
The legislative shifts introduced Type C licenses, which are valid for five years, and come with a substantial price tag of $2 million, along with an annual renewal fee of $1 million. These licenses impose a 30% tax rate on licensees. Interestingly, operators now have the chance to partner with franchises, not just venues, offering broader opportunities for collaboration and revenue generation.
FanDuel's market access is anchored in its partnership with Audi Field, enabling it to operate under a more favorable 20% tax rate. This strategic alignment showcases FanDuel's adept navigation through the regulatory waters to cement its position in the DC sports betting market.
The Competitive Landscape
Meanwhile, BetMGM and Caesars Sportsbook hold Class A licenses, affording them the privilege to offer digital platforms within a two-block exclusion zone around their respective venues, Nationals Park and Capital One Arena. These licenses reflect a strategic move designed to consolidate their presence in prime locations within the city.
Caesars has been ahead of the curve, partnering with Capital One Arena and inaugurating its sportsbook in July 2020. BetMGM followed suit, establishing its operations at Nationals Park in June 2021. FanDuel further expanded its reach by launching a retail presence at Audi Field in July 2022.
Given the array of established players and new entrants, the sports betting landscape in Washington, DC is in a dynamic phase, awaiting the vital approval of the budget bill by the mayor. The outcome will undoubtedly shape the competitive dynamics and future trajectories of these sports wagering giants in the nation's capital.