The decision to open the market was not without controversy. An amendment that would have removed the new sports betting plan was defeated, 4-9, after heated discussion. Two key issues around DC sports betting were at play Wednesday. Some councilmembers said they were concerned about the “speed” at which the change has moved forward. Others said small businesses that currently benefit from having wagering kiosks could lose the opportunity.
In the current scenario, the Office of Lottery and Gaming (OLG) has a monopoly on online wagering. As of April, FanDuel was the only operator that could offer digital betting throughout The District. BetMGM and Caesars Sportsbook have retail locations, and can offer digital betting within an exclusion zone.
Should the budget pass, it goes into effect 15 July. At that point, BetMGM and Caesars Sportsbook, both of which offer limited on-site mobile, would be able to offer their platforms throughout the city. And new operators could apply for DC sports betting licenses. In addition, proposed language allows for the creation of Type C licenses.
Wagering change has been the ‘opposite of fast-tracking’
Councilmember Kenyan McDuffie, author of the change, said his economic development committee has had 11 hearings on wagering over time and that he has been “blocked” or “stonewalled” by the OLG “at every turn.” Councilmember Charles Allen said the process has been the “opposite of fast-tracking.” Previously, the council considered some form of legal wagering in 2019 and 2022, as well.
The council initially legalised in 2019, and gave the OLG a digital monopoly for DC sports betting. The OLG contracted with lottery vendor Intralot to offer digital wagering. Intralot and the lottery rolled out GamBetDC in May 2020 to terrible reviews. The product never hit the monetary goals projected by politicians at that time.
Earlier this year, the OLG announced an agreement to allow Intralot to subcontract sports betting to FanDuel. In its first full calendar month (May) of digital wagering in DC, FanDuel broke city records for handle and revenue. It paid the city $486,071 in tax revenue, the most DC has collected in wagering tax revenue since launch, according to the Sports Handle revenue database. For comparison, the city collected $202,480 from retail and digital operators in May 2023.
Kiosk concerns unfounded?
With regard to kiosks and small business, the new proposal would not keep kiosks out of businesses. Currently, there are kiosks at lottery-partner businesses throughout the city. The kiosks were branded GamBetDC, but FanDuel is in the process of rebranding. The new legislation would not take the opportunity away.
“Nothing will change,” McDuffie said about kiosks.
As the council has discussed opening the DC sports betting market, there has been much concern about how small businesses will fare. There are currently multiple small businesses that contract with the city’s brick-and-mortar sportsbooks.
It would seem that with more operators, there would be more opportunity for small business. By law, operators are required to partner with women- and minority-owned businesses. In addition, potential entrants DraftKings and Fanatics Sportsbook said they are interested in having physical sportsbooks in DC.
Chairman backs issue because city needs money
Digital sports betting has been a fraught issue since the DC Council legalised in 2019. McDuffie and Allen, who were on the council at that time, opposed the single-source setup five years ago. McDuffie has been exploring ways ever since to change the market.
Council chair Phil Mendelson said he agreed to include the new wagering plan in the budget because the city needs the revenue. Some council members wanted the open-market bill to stand on its own. But politically, folding it into the budget makes the change an easier sell.
“It’s a complicated issue,” councilmember Brianne Nadeau said. “I think it should be a stand-alone issue. I do not like that I am being forced to vote on this as part of the budget.”
The DC Council’s committee of the whole is next scheduled to meet 18 June.