On the heels of an ambitious expansion plan, BetMGM and Caesars Sportsbook anticipated extending their sports betting footprint across Washington, DC, set to commence on Monday, 15 July. However, a crucial step remains incomplete. Mayor Muriel Bowser has not yet signed the essential budget bill, causing significant disruptions in the rollout and operations for these major betting platforms.
The delay has had immediate consequences. BetMGM, which had orchestrated a grand celebration at Nationals Park, was compelled to cancel the event. The sports betting community in DC watches closely as the local political landscape affects their betting options and experiences.
Transition and Challenges
As of Monday night, the landscape remains largely the same with FanDuel, in collaboration with the DC Lottery, holding the fort as the sole operational sportsbook option for enthusiasts. This status quo persists despite the DC Council having approved the FY 2025 budget on 25 June, which was slated to come into effect on 15 July.
This unfolding scenario is not the first time the DC sports betting framework has faced operational hiccups. In January 2019, the DC Council had endorsed a single-provider digital market model without engaging in a competitive bid process, leading to the expansion of the lottery vendor Intralot's contract to include sports wagering. The outcome was GamBetDC, a platform that encountered widespread criticism for its limited betting markets and technical issues. GamBetDC notably fell short of its ambitious revenue targets, prompting the lottery to pull the plug following a new agreement with FanDuel.
The Rise of FanDuel
The initial month of FanDuel’s operation witnessed a pronounced shift in the market dynamics. Bet handles soared by an impressive 450% compared to the same period under the beleaguered GamBetDC platform. FanDuel's significant market presence translated to a revenue uptake of $4.9 million in May 2023, dwarfing GamBetDC’s revenue of $711,282 during the same month. The city, benefiting from a 40% revenue share from lottery-backed wagering partners, is poised to gain from this revitalized betting environment.
Interestingly, Intralot’s contract expired on 15 July, coinciding with the intended start of BetMGM and Caesars Sportsbook’s expanded operations. This expiration introduces a new legal and regulatory landscape, highlighted by the introduction of Type C licenses. These licenses, valid for five years and priced at $2 million with an annual renewal fee of $1 million, come with a 30% tax rate, shifting the gears for operators eager to capitalize on partnerships with not just venues, but franchises themselves.
Classifications and Partnerships
BetMGM and Caesars Sportsbook, under their Class A licenses, enjoy significant advantages, including the ability to offer digital platforms within a two-block exclusion zone around their respective venues. This strategic move has seen Caesars Sportsbook ingraining itself within the Capital One Arena since July 2020, and BetMGM launching operations at Nationals Park from June 2021. FanDuel followed suit, establishing a retail presence at Audi Field in July 2022, further solidifying its market position through its association with the venue, which comes with a more favorable 20% tax rate.
These developments paint a transformative yet tumultuous picture of the DC sports betting landscape, pending the mayor's approval of the crucial budget bill. As betting enthusiasts and stakeholders await the final administrative nod, the dynamics of sports wagering in Washington, DC are poised on the edge of a potential paradigm shift.