Two major players in the sports betting industry, BetMGM and Caesars Sportsbook, were on the verge of expanding their footprints in Washington, DC, beginning Monday, 15 July. Despite their readiness to enter the market, a delay in signing the necessary budget bill by Mayor Muriel Bowser has thrown a wrench into their plans. Consequently, BetMGM has had to cancel its planned celebration event at Nationals Park.
While the budget bill remains unsigned, the DC sports betting landscape continues to evolve. FanDuel, in collaboration with the DC Lottery, maintains its presence as the sole operational sports betting platform available to fans in DC as of Monday night. This comes after the DC Council gave its final approval to the FY 2025 budget on 25 June, with the enactment planned for 15 July. However, the approval lag has complicated the launch schedule for other betting operators.
Historical Context and Changes
Back in January 2019, the DC Council approved a single-provider digital market for sports wagering without a competitive bid process, extending the lottery vendor Intralot's contract to include sports betting through its platform, GamBetDC. However, GamBetDC faced significant criticism for its restricted betting markets and technical issues, eventually underperforming in revenue generation. This led the lottery to terminate GamBetDC after securing a new contract with FanDuel.
The transition from GamBetDC to FanDuel proved fruitful, with FanDuel's handle experiencing a 450% increase in its first month compared to GamBetDC's performance. During May 2023, FanDuel generated a staggering $4.9 million in revenue, significantly eclipsing GamBetDC's $711,282 for the same period. These figures underscore the market's potential when helmed by a more adept platform.
Revenue and Licensing Dynamics
The city benefits financially from this burgeoning industry by receiving 40% of the revenue from lottery-backed wagering partners. The expiration of Intralot's contract on 15 July has also shifted the dynamics, paving the way for the introduction of Type C licenses. These licenses are valid for five years, cost $2 million initially, and have an annual renewal fee of $1 million. Operators under this system will incur a 30% tax rate, marking a significant commitment to the market.
The new law allows operators to partner with franchises, extending beyond just venues. FanDuel's market access, derived from its partnership with Audi Field, allows it to benefit from a reduced tax rate of 20%, showcasing the advantageous position that strategic alliances can offer. Meanwhile, BetMGM and Caesars Sportsbook hold Class A licenses, allowing them to offer digital platforms within a two-block exclusion zone around their respective venues, Nationals Park and Capital One Arena.
Current Landscape and Future Implications
Caesars Sportsbook made history by opening its sportsbook at Capital One Arena in July 2020, followed by BetMGM in June 2021 at Nationals Park. More recently, FanDuel enhanced its retail presence by launching operations at Audi Field in July 2022. These milestones highlight the escalating interest and investment in sports betting within the nation's capital.
Nevertheless, the sports betting scene in Washington, DC currently hinges on the mayor's endorsement of the budget bill. This development is crucial as it will dictate the operational timelines and strategies for BetMGM and Caesars Sportsbook moving forward. As fans await the final steps, the anticipation builds around how these changes will reshape the sports betting domain in DC.