Excitement in Washington, DC’s sports betting landscape was set to take a leap forward, with BetMGM and Caesars Sportsbook prepared to expand their operations starting Monday, 15 July. However, the celebration was cut short due to an unexpected delay in the approval of the necessary budget bill by Mayor Muriel Bowser. BetMGM's much-anticipated event at Nationals Park was subsequently canceled, leaving a vacuum in the District’s sports betting community.
Current State of Sports Betting in DC
As of Monday night, FanDuel remains the sole sports betting provider in DC, operating through a partnership with the DC Lottery. This places avid sports bettors in a near-monopoly situation, diminishing the diversity and competition expected to hit the market. The DC Council had given its final approval to the FY 2025 budget on 25 June, which was slated to become effective on 15 July. Yet, Mayor Bowser's signature is still pending, causing not only delays but also interruptions in planned activities and expansions for other key players like BetMGM and Caesars Sportsbook.
Historical Context and Market Challenges
The journey to this evolving scenario began in January 2019, when the DC Council approved a single-provider digital market without undergoing a competitive bidding process. This decision funneled the sports wagering operations through Intralot’s GamBetDC platform. Unfortunately, the platform quickly gained notoriety for its limited betting markets and persistent technical difficulties.
The consequences of these limitations soon became apparent as GamBetDC failed to meet its revenue projections. Intrarot’s contract, which had been expanded to include sports wagering, did not deliver the expected financial benefits. Consequently, GamBetDC was phased out in favor of a new contract with FanDuel. This move, it turns out, was a game-changer.
FanDuel's Remarkable Performance
FanDuel's entrance into the DC market drastically shifted the dynamics. Within the first month of its online sports betting operation, the handle experienced a 450% increase compared to the same period under GamBetDC. FanDuel generated a remarkable $4.9 million in revenue in May 2023, overshadowing GamBetDC’s revenue of $711,282 for the same month. Such stark differences underline the importance of a robust and reliable platform in capturing and sustaining market interest.
The city also gains from this arrangement, taking 40% of the revenue from lottery-backed wagering partners. This formula ensures that while companies profit, the city reaps substantial benefits as well, creating a symbiotic relationship between the public and private sectors.
The New Licensing Era
July 15 also marked the expiration of Intralot's contract, setting the stage for the introduction of Type C licenses. Valid for five years and costing $2 million with an annual renewal fee of $1 million, these licenses come with a 30% tax rate and broaden the horizon by allowing operators to partner with franchises, not just venues. This new law appears to be a strategic move aimed at diversifying and intensifying the sports betting market in Washington, DC.
FanDuel has leveraged this opportunity masterfully, aligning itself with Audi Field to secure valuable market access. By doing so, FanDuel benefits from a lower tax rate of 20%, courtesy of its partnership model.
Class A Licenses and Their Impact
Meanwhile, BetMGM and Caesars Sportsbook hold Class A licenses, permitting their digital platforms to operate within a two-block exclusion zone around their respective venues, Nationals Park and Capital One Arena. Having established its sportsbook in July 2020 at Capital One Arena, Caesars is no stranger to the DC market. BetMGM followed suit, launching at Nationals Park in June 2021. FanDuel also made a significant mark by initiating its retail operations at Audi Field in July 2022.
The impending expansions by BetMGM and Caesars would have meant more options for sports enthusiasts in DC, sparking heightened competition and likely innovations in the service offerings. However, these plans now hang in the balance, awaiting the crucial approval of the budget bill by the mayor.
Looking Forward
The sports betting landscape in Washington, DC is in a state of anticipation. The market is poised for growth and transformation, with major players ready to roll out expansions and new services. Yet, the hold-up due to the pending budget approval hampers immediate progress. As stakeholders wait, one can only speculate on the potential for increased participation and how market dynamics might evolve once BetMGM and Caesars Sportsbook eventually join FanDuel in offering their services across the city.