Two of the most prominent names in sports betting, BetMGM and Caesars Sportsbook, were poised to expand their influence across Washington, DC, as of Monday, 15 July. However, a delay in the approval of a crucial budget bill by Mayor Muriel Bowser has halted these plans, causing BetMGM to cancel a scheduled celebration at Nationals Park.
FanDuel Steals the Show
As DC sports betting enthusiasts wait, FanDuel, in partnership with the DC Lottery, remains the only operational platform in town. The DC Council had given its final approval for the FY 2025 budget as early as 25 June, with plans for it to go into effect on 15 July. Yet, the anticipation among sports bettors and operators has been stymied by the delayed endorsement from the mayor's office.
A Rocky Road for GamBetDC
The saga of sports betting in DC has been anything but smooth. Back in January 2019, the DC Council bypassed a competitive bid process, opting instead for a single-provider digital market. This led to the expansion of the lottery vendor Intralot's contract to encompass sports wagering via its platform, GamBetDC. However, GamBetDC struggled with limited betting markets and persistent technical issues, falling far short of its revenue projections.
Ultimately, the DC Lottery decided to end its run with GamBetDC, following a new agreement with FanDuel. The shift proved to be a game-changer. FanDuel's entry resulted in a staggering 450% jump in the betting handle in its initial month of operation compared to what GamBetDC had managed during the same time frame.
Reaping the Benefits
In May 2023, FanDuel generated an impressive $4.9 million in revenue, a significant leap from GamBetDC's $711,282 in the same month. The benefit for the city is substantial, as it takes 40% of the revenue from lottery-backed wagering partners. With Intralot's contract ending on 15 July, sustained growth from sports betting seems promising with FanDuel steering the ship.
Licensing and Taxes
The new legislation ushers in Type C licenses, which come with a hefty price tag of $2 million, valid for five years, while also mandating an annual renewal fee of $1 million. The tax rate for these licensees has been set at 30%. Interestingly, these operators can now partner not just with venues but with franchises as well, opening up new avenues for collaboration and revenue sharing.
FanDuel has capitalized on these changes, securing market access through its partnership with Audi Field. This collaboration enables FanDuel to operate at a competitive 20% tax rate, leveraging Audi Field’s brand to attract more bettors and bolster revenue.
Class A Licenses Holders
On the other hand, BetMGM and Caesars Sportsbook hold Class A licenses. The implications of this classification are significant. These licenses allow the operators to offer digital betting platforms within a two-block exclusion zone around their respective venues—Nationals Park for BetMGM and Capital One Arena for Caesars.
Caesars made its first foray into the DC market by partnering with Capital One Arena and launching its sportsbook in July 2020. BetMGM followed suit by establishing operations at Nationals Park in June 2021. Meanwhile, FanDuel solidified its physical presence in the city by launching at Audi Field in July 2022.
Awaiting the Mayor's Decision
As the sports betting landscape in Washington, DC takes shape, all eyes are on Mayor Bowser and the pending approval of the budget bill. This decision will not only define the immediate future for BetMGM and Caesars Sportsbook but also set the pace for the burgeoning sports betting market in the nation's capital.