![Expansion of Sports Betting in Washington, DC Faces Delays](/img/breaking.png)
Expansion of Sports Betting in Washington, DC Faces Delays
In a well-anticipated move, two significant players in the sports betting industry, BetMGM and Caesars Sportsbook, were poised to widen their reach in Washington, DC, starting Monday, 15 July. However, the expansion has hit a bump in the road due to a delay in the approval of a crucial budget bill by Mayor Muriel Bowser.
The long-awaited budget bill, essential to formalize and smoothen operations for these betting giants, remains unsigned, causing immediate ripples in the DC sports betting landscape. The delay has notably led BetMGM to call off its planned celebratory event at Nationals Park, scheduled to kick off their expanded services.
Current Landscape and Shifts
As of Monday night, BetMGM and Caesars Sportsbook have to wait on Mayor Bowser's nod to proceed. Meanwhile, FanDuel, partnering with the DC Lottery, stands as the sole sports betting platform available to enthusiasts in the Capitol. This comes in the wake of the DC Council's final approval of the FY 2025 budget on 25 June, which was set to take effect from 15 July.
The dynamics of DC's sports betting market have been evolving over the years. Back in January 2019, the DC Council approved a single-provider digital market without opting for a competitive bid process. This led to the extension of the current lottery vendor, Intralot's contract, to include sports wagering through its GamBetDC platform. However, the platform was met with heavy criticism for its perceived limitations in betting markets and recurrent technical issues. It also consistently fell short of its revenue projections, prompting the lottery to shut it down upon entering a new contract with FanDuel.
Impact of FanDuel's Entry
The arrival of FanDuel marked a significant shift, with the handle—a term referring to the total amount of money wagered so far—soaring by 450% in the first month compared to GamBetDC's performance during the same period. This substantial surge saw FanDuel generating $4.9 million in revenue in May 2023, overshadowing GamBetDC's $711,282 revenue for the same month.
The financial arrangement under the lottery-backed wagering partners further benefits the city, which takes a substantial 40% cut of the revenue. Intralot's contract, crucial to this framework, expired on 15 July, coinciding with the planned expansion of BetMGM and Caesars Sportsbook.
New Licensing and Tax Framework
The impending new law introduces Type C licenses, valid for five years and costing $2 million with an annual renewal fee of $1 million. These licenses will entail a 30% tax rate, reflecting a structured and potentially lucrative regulatory environment for operators. Notably, the new framework allows operators to partner with franchises and not just physical venues.
FanDuel's market access, for instance, is firmly anchored through its partnership with Audi Field, which also enables it to benefit from a favorable 20% tax rate. On the other hand, BetMGM and Caesars Sportsbook operate under Class A licenses, permitting them to offer digital platforms within a two-block exclusion zone around their respective venues—Nationals Park and Capital One Arena.
Caesars Sportsbook, in collaboration with Capital One Arena, inaugurated its sportsbook in July 2020, establishing a physical and digital foothold in the market. BetMGM followed suit, launching its operations at Nationals Park in June 2021. Most recently, FanDuel extended its presence to a retail operation at Audi Field in July 2022.
Awaiting the Mayor's Decision
The current state of DC's sports betting sector hinges on the final approval of the budget bill by Mayor Bowser. The transformative shifts, seen from the GamBetDC phase to the burgeoning success of FanDuel, underscore a dynamically evolving market. However, the potential delay due to the budget bill's hold-up serves as a reminder of the intricate balance between regulation, operation, and market expansion. The signing of the bill will not only pave the way for BetMGM and Caesars but also sets a precedent for future digital sports betting endeavors within the District.