Expansion and Competition in DC's Sports Betting Landscape
Two major players in the sports betting world, BetMGM and Caesars Sportsbook, have been slated to expand their presence across Washington, DC. This expansion was set to begin on Monday, 15 July. However, the celebratory tone has been dampened due to delays in the signing of the necessary budget bill by Mayor Muriel Bowser, leading BetMGM to cancel its planned celebration at Nationals Park.
The sports betting scene in DC has been a topic of significant change and development over the past few years. As of Monday night, FanDuel, in partnership with the DC Lottery, stands alone as the only available sports betting platform for enthusiasts in the nation's capital. This status quo comes on the heels of the DC Council's final approval of the FY 2025 budget on 25 June, which was scheduled to go into effect on 15 July.
Back in January 2019, the DC Council had made a crucial decision to approve a single-provider digital market without engaging in a competitive bid process. This led to the expansion of the lottery vendor Intralot's contract to include sports wagering, ushering in the era of the GamBetDC platform. However, GamBetDC faced substantial criticism for its limited betting markets and recurring technical issues, falling short of its revenue promises.
A turning point came when the lottery decided to shut down GamBetDC following a new contract with FanDuel. The change was well-received, as evidenced by a 450% surge in the handle in the initial month of FanDuel's online sports betting operation compared to the same period under GamBetDC. In May 2023 alone, FanDuel generated an impressive $4.9 million in revenue, whereas GamBetDC’s revenue for the same month was a mere $711,282. The transition has clearly proved beneficial, with the city taking 40% of the revenue from lottery-backed wagering partners.
The evolution of sports betting in DC is also marked by the introduction of new licensing structures. The new law introduces Type C licenses, now valid for five years and carrying an application cost of $2 million, with an annual renewal fee of $1 million. Licensees under this category will pay a 30% tax rate. Furthermore, operators can now partner with franchises, extending beyond just venues. For instance, FanDuel’s market access comes from its partnership with Audi Field, which allows it to pay a reduced tax rate of 20%.
Both BetMGM and Caesars Sportsbook hold Class A licenses, which permit these operators to offer digital platforms within a two-block exclusion zone around their respective venues, Nationals Park and Capital One Arena. Caesars Sportsbook solidified its presence by partnering with Capital One Arena and opening its sportsbook in July 2020. A year later, in June 2021, BetMGM launched its operations centered around Nationals Park. FanDuel, not to be left behind, made its retail presence felt at Audi Field in July 2022.
The sports betting landscape in Washington, DC, stands at a crucial juncture, contingent on the mayor’s approval of the budget bill. While the delay has stalled some celebrations and expansions, it underscores the dynamic and swiftly changing nature of sports betting in the district. As stakeholders await the final signature, the competition among these major platforms continues to intensify, shaping the future of sports betting in the heart of the nation.