Two of the major players in the sports betting industry, BetMGM and Caesars Sportsbook, were poised to significantly expand their presence in Washington, DC on Monday, July 15. However, the city's sports betting landscape remains in a state of flux pending Mayor Muriel Bowser's signature on the necessary budget bill.
Budget Bill Delays Affect Launch Plans
As bettors eagerly awaited the expanded options, the mayor's delay in signing the budget bill cast a shadow over the plans. This hesitation prompted BetMGM to cancel its anticipated celebration at Nationals Park. With the budget bill still in limbo, sports betting enthusiasts in the District are left with limited options.
Current Landscape: FanDuel Stays Firm
For now, FanDuel in collaboration with the DC Lottery remains the only active sports betting platform in the area. Despite the setbacks faced by its competitors, FanDuel’s partnership has proven resilient, especially given the struggles faced by previous providers.
In January 2019, DC Council made the significant decision to approve a single-provider digital market without initiating a competitive bid process. This resulted in an expanded contract for lottery vendor Intralot, which included sports wagering through its GamBetDC platform. However, GamBetDC did not meet expectations, suffering from a limited range of betting markets and ongoing technical issues.
The Rise of FanDuel: A Game Changer
GamBetDC's inability to deliver on revenue promises led the DC Lottery to seek a new partner. The decision to partner with FanDuel proved to be a masterstroke. Upon FanDuel's entry into the market, the betting handle soared by 450% in its first month compared to the same period under GamBetDC’s regime. Remarkably, FanDuel generated $4.9 million in revenue in May 2023, a stark contrast to GamBetDC’s $711,282 for the same month.
The city’s coffers benefit significantly from FanDuel’s success, with the local government taking 40% of the revenue from lottery-backed wagering partners. As a result, Mayor Bowser's pending approval of the budget bill is critical not just for the expansion plans of BetMGM and Caesars Sportsbook, but for the continued financial health of the city's sports betting landscape.
New Licensing Framework
A new law that introduces Type C licenses could pave the way for further innovations. These licenses, valid for five years at a cost of $2 million, impose an annual renewal fee of $1 million and carry a tax rate of 30%. This move allows operators to partner with sports franchises, not just venues, broadening the scope for collaboration and innovation within the industry.
BetMGM and Caesars: Navigating New Terrain
BetMGM and Caesars Sportsbook each 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. Caesars, having partnered with Capital One Arena, opened its sportsbook in July 2020. Meanwhile, BetMGM made its debut at Nationals Park in June 2021. Most recently, FanDuel established a retail presence at Audi Field in July 2022, utilizing its market access through this partnership to navigate the complex taxation landscape, paying a 20% tax rate as a partner of Audi Field.
Anticipation Builds Amid Budget Bill Uncertainty
The sports betting scene in Washington, DC waits with bated breath as Mayor Bowser’s approval of the budget bill is still pending. While FanDuel maintains its stronghold, the potential expansions by BetMGM and Caesars Sportsbook could significantly alter the betting landscape. Fans and industry stakeholders alike hope for swift regulatory resolutions to unlock the full potential of a competitive and thriving sports betting market in the nation’s capital.