![Expansion in Washington, DC Faces Budget Snag](/img/breaking.png)
Expansion in Washington, DC Faces Budget Snag
Two of the country’s heavyweight sports betting platforms, BetMGM and Caesars Sportsbook, have been earmarked for a major expansion across Washington, DC. However, the much-anticipated date of Monday, July 15, passed with an unexpected halt due to unresolved budgetary provisions.
Mayor Muriel Bowser has yet to put her signature on the necessary budget bill, leading to a pause in the progressive rollout of these platforms. The budget's delayed approval had immediate effects, causing BetMGM to cancel a planned celebration at Nationals Park, where the betting giant had already launched operations in June 2021.
Current Landscape
As of Monday night, FanDuel, in a strategic partnership with the DC Lottery, remains the sole sports betting platform accessible to enthusiasts in the district. The DC Council had given final approval to the FY 2025 budget on June 25, with expectations initially set for it to activate on July 15. The council's earlier approval was pivotal for determining the broader sports betting landscape, reflecting years of legislative and operational adjustments in the District of Columbia.
Notably, in January 2019, the DC Council approved a single-provider digital market. This decision bypassed a competitive bid process and saw the expansion of the lottery vendor Intralot's contract to include sports wagering. However, the GamBetDC platform from Intralot faced backlash due to its limited betting markets and persistent technical issues, leading to revenue shortfalls compared to initial projections.
FanDuel's Meteoric Rise
A shift occurred with the DC Lottery forming a fresh contract with FanDuel, which quickly dominated the market. The initial month of FanDuel’s operation online saw a stunning 450% increase in handle compared to the same period under GamBetDC. Moreover, FanDuel generated an impressive $4.9 million in revenues for May 2023, starkly contrasting GamBetDC’s $711,282 for the same month.
The city's partnership with these lottery-backed wagering platforms has also been financially advantageous, given that 40% of the revenue flows back to the city’s coffers. As of July 15, Intralot's contract officially expired, paving the way for new regulatory frameworks and competitive possibilities.
New Licensing Framework Introduced
The recent legislation introduces Type C licenses, a promising development for smaller operators. These five-year licenses come at a cost $2 million, with an annual renewal fee set at $1 million. Additionally, licensees are subject to a 30% tax rate.
A critical provision in the new law allows operators to partner with local franchises, rather than being restricted to physical venues. This more flexible arrangement benefits operators like FanDuel, which has secured market access through its alignment with Audi Field. Notably, FanDuel pays a 20% tax rate due to its status as an Audi Field partner.
Class A License Holders
BetMGM and Caesars Sportsbook remain significant players within Washington, DC’s sports betting ecosystem. Both hold Class A licenses, enabling them to provide digital platforms within a two-block radius of their respective venues—Nationals Park for BetMGM and Capital One Arena for Caesars.
Caesars made a bold move by opening its sportsbook at Capital One Arena back in July 2020, marking it as one of the pioneers in the space. Following suit, BetMGM launched its operations at Nationals Park in June 2021, with both platforms aiming to capitalize on the robust sports culture in the nation’s capital. FanDuel also marked its territory by establishing a retail presence at Audi Field in July 2022.
Despite their readiness and infrastructure, the sports betting expansion in Washington, DC hinges on the mayor’s approval of the budget bill. Without this crucial step, the plans for a broader sports betting framework remain in limbo, awaiting governmental green light to unlock their full potential.