BetMGM and Caesars Expansion Paused Amid Budget Delays in DC
Washington, DC's sports betting landscape is on the verge of a significant evolution, with major players BetMGM and Caesars Sportsbook set to expand their presence in the area. Originally, these expansions were scheduled to commence on Monday, 15 July, poised to bring more excitement and options to local betting enthusiasts. However, an unresolved budget bill has thrown a wrench into these plans.
Mayor Muriel Bowser has yet to sign the critical budget bill, delaying its anticipated approval. This delay led BetMGM to cancel a planned celebration at Nationals Park, which would have marked their expanded presence in the capital.
As of the night of 15 July, FanDuel, in partnership with the DC Lottery, is the sole sports betting platform available to Washington, DC residents. This exclusive availability follows the DC Council's final approval of the FY 2025 budget on 25 June, which was meant to be effective by mid-July.
The sports betting scene in Washington, DC, has seen many shifts since January 2019, when the DC Council approved a single-provider digital market without a competitive bid process. This decision expanded the contract of lottery vendor Intralot to encompass sports wagering, introducing the GamBetDC platform. However, GamBetDC faced substantial criticism due to a variety of technical issues and limited betting markets, ultimately falling short of its revenue promises.
Faced with GamBetDC's shortcomings, the DC Lottery turned to FanDuel. Following this new partnership, the GamBetDC platform was shut down. The shift to FanDuel made an immediate impact, with the handle—the total amount of money wagered—skyrocketing by 450% in the first month of FanDuel's operations compared to the same period under GamBetDC. In financial terms, FanDuel generated $4.9 million in revenue in May 2023, a stark contrast to GamBetDC's $711,282 during the same month.
The city of Washington, DC benefits significantly from these operations, netting 40% of revenue from lottery-backed wagering partners. The expired contract of Intralot on 15 July marked the end of an era and highlighted the city's evolving approach to sports betting regulation and partnership.
Recent legislative actions introduced Type C licenses, bringing more changes to the regulatory landscape. These licenses, valid for five years, come with a $2 million cost and an annual renewal fee of $1 million, along with a 30% tax rate. This new category allows operators to partner with sports franchises, not just venues, expanding the potential market network.
FanDuel's market access arises from its partnership with Audi Field, through which the company aligns to pay a 20% tax rate. In contrast, BetMGM and Caesars Sportsbook operate under Class A licenses, permitting them to offer their digital platforms within a two-block exclusion zone around their partner venues, Nationals Park and Capital One Arena, respectively.
Caesars initiated its sportsbook at Capital One Arena back in July 2020, while BetMGM launched operations at Nationals Park in June 2021. Following suit, FanDuel opened its retail presence at Audi Field in July 2022, marking a competitive and diverse landscape for sports betting in the nation's capital.
Yet, the entire sports betting operation remains in limbo due to the pending approval of the budget bill by Mayor Bowser. Until this bureaucratic hurdle is cleared, the envisaged expansions by BetMGM and Caesars Sportsbook will remain on hold, with FanDuel alone serving the city's passionate betting community.
This delay underscores the intricate interplay between political processes and business ambitions in the regulated gambling market. As stakeholders await the approval, the city continues to witness a transformative period, reshaping its sports betting environment and setting the stage for future developments.
Sports enthusiasts and betting operators alike watch closely, anticipating how these changes will unfold in a city that has become an emerging hub for sports wagering.