In an unprecedented move to stimulate competition and improve the performance of the sports betting industry, the DC Council’s recent budget approval has set the stage for an open and competitive wagering marketplace. The council’s passage of the Budget Support Act, done via voice vote and designed to bypass sending the budget to Congress for approval, marks a turning point. Set to take effect on July 15, this new budget envisions an inclusive environment for commercial operators, offering opportunities for growth and competition in the District.
The new fiscal plan will enable commercial operators to break into the market, leading to a positive ripple effect across established players. BetMGM, operating at Nationals Park, and Caesars Sportsbook, based at Capital One Arena, are expected to expand their digital offerings imminently. Currently, these operators are limited by existing partnerships that only allow digital betting within an exclusion zone. However, under the novel framework, their platforms will become accessible across the entire District.
Previously monopolistic in its approach, the DC sports betting market had FanDuel exclusively operating under a deal with the DC Lottery. FanDuel launched its platform in April and replaced the lottery’s underperforming GamBetDC with a more efficient system. Interestingly, FanDuel’s president, Christian Genetski, indicated on June 5 that FanDuel would abandon its exclusivity with the lottery if the market was opened to competition. With the new budget plan, operators will face a reduced tax rate of 20%, contrasting sharply with the 40% rate paid by FanDuel for monopolistic rights.
Operators like BetMGM and Caesars are not new to the push for a more inclusive market landscape. Brandt Iden, Vice President of Government Affairs at Fanatics Betting & Gaming, played a crucial role in rallying the operators, presenting a united front for market deregulation. Council member Kenyan McDuffie, a long-time skeptic of sole-source contracts, found the arguments compelling and threw his support behind the initiative. McDuffie’s advocacy proved instrumental, turning what was once a poorly performing market into a potential blueprint for other sole-sourced regions.
Iden succinctly captured the sentiment of the industry, stating: “For years, this market has been held together by a thread and some silly putty. It was one of the worst performing markets in the country and now it will be the first to go from a single mobile operator to a competitive market. Thanks to council member Kenyan McDuffie, DC will become a leader for other closed markets.
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The budget’s sports betting provision also aims to protect small businesses by passing an amendment that ensures the continuation of betting kiosks in locations like convenience stores and bars. Previously, these venues hosted GamBetDC kiosks. FanDuel has committed to replacing them with its own devices. However, concerns linger among council members about potential service gaps or the reluctance of commercial operators to provide kiosks under the new plan.
BetMGM, Caesars, and FanDuel are likely to be the first operators to fully integrate their digital platforms across DC, given that they are already functioning within the District. Meanwhile, major players like DraftKings and Fanatics have also expressed keen interest in entering the market. Representatives from these companies testified earlier this year, eager to set up physical sportsbooks and tap into the DC market.
Before new operators can go live, they will undergo a vetting process, ensuring they meet the necessary regulatory standards. Given that BetMGM and Caesars are already approved for online sports betting, their transition to broader access is anticipated to be swift. FanDuel, with its existing infrastructure, appears well-positioned to maintain its services uninterrupted across the District.
Prior to this transformative vote, DC was one of six markets in the U.S. allowing only a single sports betting operator. Of the remaining five singular markets, four operate under state lottery regulations or in partnership with state lotteries. Florida stands out with its exclusive contract between the state and the Seminole Tribe.
In summary, the DC Council’s move to open the sports betting market represents a victory for commercial operators and a significant shift towards progressive market reforms. This competitive framework could set a precedent for other regions, showcasing the benefits of moving away from monopolistic models towards more inclusive, competitive environments.
