Two major players in the sports betting industry, BetMGM and Caesars Sportsbook, were on the cusp of expanding their footprint in Washington, DC. The planned expansion was originally set to commence on Monday, July 15. However, an unresolved hurdle in the form of an unsigned budget bill by Mayor Muriel Bowser has led to delays and cancellations.
Expansion Plans Stalled
The much-anticipated addition of BetMGM and Caesars Sportsbook to the DC betting landscape could have significantly boosted the local sports betting market. BetMGM, which had orchestrated a celebratory event at Nationals Park, was forced to cancel due to the hold-up in budget approval. The setback raises questions about the readiness of Washington, DC to embrace such significant expansions in the sports betting domain.
As of Monday night, FanDuel, in collaboration with the DC Lottery, remains the lone sports betting platform available to enthusiasts in the nation's capital. This exclusivity might change soon, contingent upon the mayor’s approval of the budget bill that aims to accommodate these new players.
Final Approval Given, but Delays Persist
The DC Council provided the final nod to the FY 2025 budget on June 25, setting the stage for its enforcement by July 15. Nevertheless, the delayed sign-off by Mayor Bowser has thrown a wrench in the rollout, keeping BetMGM and Caesars Sportsbook in a holding pattern.
This regulatory bottleneck is not unprecedented. The DC Council's earlier decision in January 2019 to establish a single-provider digital market without a competitive bid process culminated in the monopoly of Intralot's GamBetDC platform. This decision witnessed mixed responses, primarily due to the platform’s subpar performance.
From GamBetDC to FanDuel: A Game-Changer
Intralot's GamBetDC has faced substantial criticism since its inception, particularly for its limited betting markets and recurring technical issues. Moreover, the platform did not meet projected revenue figures, prompting the DC Lottery to pivot towards a new partnership with FanDuel.
The introduction of FanDuel marked a significant turnaround. FanDuel’s market entry saw an overwhelming 450% increase in the initial month's handle compared to the same period under GamBetDC. The new platform generated $4.9 million in revenue in May 2023, dwarfing GamBetDC’s earnings of $711,282 for the same timeframe.
Washington, DC's decision to embrace FanDuel bore dividends. The city retained 40% of the revenue generated by lottery-backed wagering partners, thanks to a more effective platform.
Regulatory Shifts and New Licensing
Intralot’s contract, which expired on July 15, paved the way for regulatory evolutions. New legislation introduced Type C licenses, valid for five years, costing $2 million with an annual renewal fee of $1 million. Under this regime, licensees will be subjected to a 30% tax rate. Unlike previous stipulations, the new law permits operators to associate with franchises, not just venues.
FanDuel, leveraging its partnership with Audi Field, benefits from a more favorable 20% tax rate. This strategic alignment underscores FanDuel's growing influence and adapts to the evolving market dynamics in DC.
Class A Licenses and Venue Partnerships
BetMGM and Caesars Sportsbook operate under Class A licenses, which permit them to provide digital platforms within a two-block radius of their respective venues, Nationals Park and Capital One Arena. Caesars made its mark by launching a sportsbook at Capital One Arena in July 2020, while BetMGM followed suit at Nationals Park in June 2021. FanDuel entered the retail space with its presence at Audi Field in July 2022.
Despite these developments, the ongoing delay in the budget bill ratification has cast a shadow of uncertainty over the sports betting landscape in Washington, DC. The industry waits with bated breath for Mayor Bowser's final signature to greenlight the expanded operations.
In conclusion, the intricate dance of regulatory approvals and market entries continues to shape the future of sports betting in DC. The city stands on the brink of a significant transformation, one that promises to enhance the experience for local betting enthusiasts and elevate the region's economic stakes.