Washington D.C. Bill Could Create Competitive Betting System

Washington D.C. council member Kenyan McDuffie is proposing a bill to bring a more competitive online sports betting marketplace to the district. The news was first reported by The Washington Post. 

McDuffie’s bill, which will be introduced officially on Friday, would create a new class of sports betting licenses. A Class C license, which would be reserved for “eligible sports team applicants,” would allow three well-known betting apps to offer online betting across most of Washington D.C. 

His proposal comes shortly after the D.C. Lottery shared its plan to have FanDuel be Washington D.C.’s lone mobile operator. 

Currently, GambetDC is the only betting app available across the majority of Washington D.C. BetMGM (Nationals Park), Caesars Sportsbook (Capital One Arena), and FanDuel (Audi Field) all have retail sportsbooks in the District, but they aren’t granted widespread mobile sports betting access. BetMGM and Caesars Sportsbook are only allowed to accept mobile wagers within a two-block radius of their retail sportsbooks.

Sports Wagering Amendment Act of 2024 For Introduction

Bill requires sports team partnership 

The bill would change that, although it wouldn’t allow operators like DraftKings and Fanatics Sportsbook to enter the market without first partnering with a “sports team applicant.” 

A sports team applicant must be registered with the MLB, MLS, NBA, NFL, NHL, NWSL, or WNBA. A sports team applicant must also play 90% of its home games in Washington D.C., have its corporate headquarters and the majority of its employees based in D.C., and play its home games at a sports stadium or arena with a sports wagering facility. 

Currently, that applies to just BetMGM, Caesars Sportsbook, and FanDuel. McDuffie addressed questions about his bill not opening up a fully competitive market in a written FAQ document. 

“That approach could have worked better if we were starting off that way,” McDuffie said. “But after I spoke with operators and our local franchises about the issues, it became clear that would be very disruptive and harmful to the Class A and B operators who already invested in retail sportsbooks in Downtown, Navy Yard, Buzzard Point, and other locations throughout the District. We need more competition in sports wagering platforms and this bill allows for that to happen.”

McDuffie left open the possibility that the market could eventually add a few more operators, though. Both Maryland and Virginia have competitive-only sports betting markets.

Class C licenses would cost operators $2 million and last five years. The renewal fee due every five years would cost $1 million. Sports betting revenue would be taxed at 30%, under the proposal. 

Why a change?

A move away from GambetDC was deemed necessary by the lottery after the betting app dealt with numerous issues ranging from a Super Bowl outage to an abysmal user interface. The platform also struggled to deliver on revenue projections, bringing just $4.3 million in tax revenue to the District over four fiscal years. 

Third-party provider Intralot and the D.C. Lottery proposed that GambetDC be replaced by FanDuel earlier this month. McDuffie isn’t sold on that proposal, though. His bill looks to bring a few mobile operators into the District, rather than just one. 

Intralot’s contract to run sports betting in the District expires in July. McDuffie has voiced his displeasure about the lottery not working faster to set up the framework for a competitive sports betting market, knowing Intralot’s contract was set to expire in the coming months. 

“I was incredulous when I learned that OLG waited until just recently, less than six months before contract end, to bring in a new platform operator,” McDuffie said in the FAQ document. “They’ve known this contract was expiring in July of 2024. Why didn’t they issue a new procurement that would have been in place at the contract end? It was a lazy move and an attempt to force this Council to settle for the status quo.”

McDuffie is hopeful his plan could take effect as soon as this summer, bypassing the lottery’s FanDuel proposal and giving D.C. residents widespread access to a trio of mobile sportsbooks. 

“Based on feedback from other industry experts and regulators, my goal was to get the number to at least 6-8 major operators in the District,” McDuffie said. “This bill presents a pathway to that target. I recognize that could take several months, so we also wanted to ensure our existing three operators have a pathway to open mobile sports wagering as soon as this summer.”