The sports betting landscape in Washington, DC is on the cusp of a transformation, with major players like BetMGM and Caesars Sportsbook poised to expand their operations. Originally set to commence on Monday, July 15, these expansions faced an unexpected setback due to delays in the city's budget approval process.
Mayor Muriel Bowser has not yet signed the necessary budget bill, delaying the scheduled activations. This delay has already had tangible repercussions, compelling BetMGM to cancel its planned celebration event at Nationals Park.
Current Sports Betting Scenario in DC
As of Monday night, FanDuel, in collaboration with the DC Lottery, remains the sole sports betting platform available to DC enthusiasts. FanDuel's dominant position arises from a partnership with the DC Lottery that has proven highly beneficial for both parties. Thus far, FanDuel appears to be thriving in an environment where its competitors are temporarily hamstrung.
The DC Council had formally approved the FY 2025 budget on June 25, with an effective date slated for July 15. Unfortunately, the delay in mayoral approval has thrown a wrench in the plans of BetMGM and Caesars Sportsbook.
Looking back, the DC Council decided in January 2019 to approve a single-provider digital market without engaging in a competitive bid process. This decision extended the contract of the lottery vendor, Intralot, to encompass sports wagering as well. However, Intralot’s GamBetDC platform received criticism for its limited betting markets and technical issues and failed to meet revenue expectations. Consequently, GamBetDC is set to shut down following a new contract with FanDuel.
FanDuel's Meteoric Rise
FanDuel's introduction into the market has been nothing short of remarkable. The handle—a term that describes the total amount of money wagered—shot up by 450% in the first month of FanDuel's online sports betting operation compared to the same timeframe under GamBetDC. May 2023 figures show that FanDuel generated $4.9 million in revenue, dwarfing the $711,282 revenue produced by GamBetDC during the same month.
The city stands to benefit significantly from these shifts, taking 40% of the revenue from lottery-backed wagering partners. Intralot's contract expired on July 15, paving the way for FanDuel's expanded role.
New Licensing Framework
The new law introduces Type C licenses, which are valid for five years and come with a $2 million fee, alongside a $1 million annual renewal fee. Additionally, licensees will pay a 30% tax rate. This new framework offers operators the flexibility to partner with franchises, widening the scope beyond just venues.
FanDuel’s own market access has been secured through a partnership with Audi Field, allowing it to pay a substantially lower tax rate of 20%. BetMGM and Caesars Sportsbook, however, hold Class A licenses, which permit them to operate digital platforms within a two-block exclusion zone around their respective venues—Nationals Park and Capital One Arena.
Caesars’ partnership with Capital One Arena dates back to July 2020, while BetMGM rolled out its operation at Nationals Park in June 2021. FanDuel added to its market presence by launching its retail operations at Audi Field in July 2022.
Awaiting Approval
The entire sports betting environment in Washington, DC hinges upon Mayor Bowser's forthcoming decision to sign the budget bill. Until that happens, the anticipated expansions of BetMGM and Caesars will remain on hold, leaving FanDuel the temporary king of DC’s sports betting hill. This situation amplifies the stakes for all parties involved, as the future of DC’s sports betting market hangs in the balance, awaiting a crucial legislative nod.