In a significant development for sports betting enthusiasts in Washington, DC, two major platforms, BetMGM and Caesars Sportsbook, were poised to expand their presence in the nation's capital starting Monday, 15 July. However, this expansion faces a crucial delay as Mayor Muriel Bowser has yet to sign the necessary budget bill.
Delays Impacting BetMGM's Celebrations
The delayed approval of the budget bill has had immediate consequences, causing BetMGM to cancel its planned celebration at Nationals Park. Despite the setback, BetMGM and Caesars Sportsbook remain committed to their expansion plans, signaling their readiness to move forward once official approvals are secured. As of Monday night, FanDuel, in partnership with the DC Lottery, remains the sole sports betting platform available in DC, providing a temporary monopoly in the market.
Final Approval and the New Budget
The DC Council granted final approval to the FY 2025 budget on 25 June, originally scheduled to come into effect on 15 July. However, Mayor Bowser's pending signature has led to unforeseen delays, highlighting the critical intersection between legislative processes and business operations in the fast-evolving world of sports betting.
A Brief History: Digital Market and Intralot's Role
Recalling the roots of sports betting in DC, the DC Council had approved a single-provider digital market in January 2019 without engaging in a competitive bid process. This decision expanded the contract of lottery vendor Intralot to include sports wagering, laying the foundation for what would become the GamBetDC platform.
Despite hopes for success, GamBetDC faced substantial criticism for its limited betting markets and technical issues, ultimately falling short of its revenue promises. The platform's underperformance led the lottery to make the strategic decision to shut it down, paving the way for a new contract with FanDuel.
FanDuel's Meteoric Rise
FanDuel quickly capitalized on the opportunity, with its online sports betting operation experiencing a 450% increase in handle in its first month compared to the same period under GamBetDC. In May 2023, FanDuel generated an impressive $4.9 million in revenue, dramatically outpacing GamBetDC's $711,282 for the same month.
This surge in performance underscores the potential of a competitive market, benefiting the city as it takes 40% of the revenue from lottery-backed wagering partners. Notably, Intralot's contract, which expired on 15 July, marks a turning point in the city's sports betting landscape.
New Regulations and Licensing
The new law introduces Type C licenses, valid for five years at a cost of $2 million with a $1 million annual renewal fee. Licensees are subject to a 30% tax rate, offering operators a clear framework for entering the market. Significantly, the new regulations allow operators to partner not just with venues but also with franchises, expanding possibilities for strategic alliances.
FanDuel's market access stems from its partnership with Audi Field, allowing it to align as the field’s partner and benefit from a 20% tax rate. Meanwhile, BetMGM and Caesars Sportsbook hold Class A licenses, which permit them to offer digital platforms within a two-block exclusion zone around their respective venues — Nationals Park and Capital One Arena. These strategic partnerships and licensing structures highlight the evolving dynamics of sports betting in Washington, DC.
Strategic Launches and Future Prospects
Caesars partnered with Capital One Arena and opened its sportsbook in July 2020, setting a precedent for other operators. BetMGM followed suit, launching its operation at Nationals Park in June 2021, while FanDuel commenced its retail presence at Audi Field in July 2022.
As the sports betting landscape awaits Mayor Bowser's approval of the budget bill, the anticipation continues to build. The industry's future in Washington, DC remains intricately tied to legislative actions and market dynamics, with stakeholders keenly observing every development.
Ultimately, the expansion of sports betting platforms like BetMGM and Caesars Sportsbook signifies a pivotal era for sports enthusiasts in the capital, heralding increased options and enhanced experiences once the final regulatory hurdles are cleared.