Four sports betting operators testified during a Washington D.C. Council committee hearing in support of a bill to bring an open, competitive sports wagering marketplace to the District. Despite their support, it could be years until a betting app other than FanDuel accepts wagers across Washington D.C.
Representatives from BetMGM, Caesars Sportsbook, DraftKings, and Fanatics Sportsbook all spoke at Wednesday’s Business and Economic Development Public Hearing, showing support for D.C. Councilmember Kenyan McDuffie’s bill that aims to bring multiple sports betting apps to the District.
Currently, only FanDuel is granted District-wide mobile access. FanDuel gained widespread mobile access in April, replacing GambetDC by becoming an Intralot subcontractor. D.C. Lottery’s executive director, Frank Suarez, shared Wednesday that FanDuel’s mobile entrance has been a major success, with bettors wagering $14 million on the app in its first two weeks. That’s more than was wagered combined in February and March through GambetDC.
“We’re no longer in the Gambet world, this is the FanDuel world,” Suarez said.
Lottery and McDuffie clash
The lottery seems content with keeping the Intralot deal in place, while McDuffie wants more than just FanDuel available to customers. Making that dream a reality isn’t simple, due to the details of the Intralot contract.
Intralot’s contract to run the Washington D.C. Lottery system and sports betting system expires in mid-July, but because the D.C. Lottery hasn’t prepared a request for proposal for a new entity to handle those services well in advance of the contract expiration, it’s likely FanDuel will operate as D.C.’s lone mobile betting app for the immediate future. The lottery is requesting a two-year extension of the Intralot deal, at which time it can produce a request for proposal for a new lottery operator and sports betting system.
A lottery lawyer told McDuffie on Wednesday it likely requires legislation to untie the lottery and sports betting aspects of the Intralot contract. Given that they’re tied together and an RFP for a new lottery operator hasn’t been created, letting the contract expire to allow for a swift implementation of a competitive mobile sports betting marketplace would effectively shut down the lottery.
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As a result, Intralot holds significant leverage in having its contract extended, despite offering a sports betting product (GambetDC) that had to be replaced by FanDuel due to its many failures.
“I resent that, to be candid with you,” McDuffie said. “I think the District of Columbia, the nation’s capital, should be in a better situation today, on May 6, than we are. We should not have to make a decision under duress about generating revenue with a company that has failed miserably at managing our sports wagering operation. I think there’s a case to be made that they shouldn’t be a part of it.”
McDuffie repeatedly shared his disappointment Wednesday that the lottery wasn’t more proactive about altering the future of Washington D.C. sports betting.
Suarez and the lottery were unwilling to admit that they should’ve worked faster to make a change, suggesting the FanDuel switch is great for both customers and D.C. revenue creation.
“We’ve had many discussions in the past, councilmember, where you said we needed to make a change and we needed to fix, and this is what we’ve done,” Suarez said. “That’s why we brought FanDuel in.”
Wednesday wasn’t the first time McDuffie and Suarez have butted heads in recent years.
Operators offer mostly positive feedback
Other operators are hopeful FanDuel won’t dominate D.C. betting for too much longer.
That’s especially true for BetMGM and Caesars Sportsbook, each of which have poured significant financial investment into retail sportsbooks in D.C. Those thrived as GambetDC floundered, but are at risk of becoming less successful with FanDuel gaining widespread mobile access.
BetMGM and Caesars want increased access to customers in the jurisdiction through mobile betting. DraftKings and Fanatics Sportsbook say they’re ready to enter the market, too.
“We are engaged in active discussions with prospective team license holders right now, and we anticipate that we will have a partnership in place to hit the ground running, should the legislation be passed and enacted,” Matt Scalf, government affairs manager at DraftKings, said.
About the only form of negative feedback to McDuffie from operators came from Dan Shapiro, a senior vice president and chief development officer at Caesars Sportsbook. He spoke to the committee Wednesday, supporting the mobile bill, but also requesting McDuffie’s proposed tax rate of 20% only be applicable to mobile wagering. Currently, retail sportsbooks pay a 10% tax, and he doesn’t want to see that raised.
“This bill should not have the effect of closing down sportsbooks and laying off employees,” Shapiro said.
Like most D.C. meetings about sports betting in recent years, Wednesday’s came without an obvious path forward for potential changes. The most likely immediate outcome is a renewal of the Intralot deal, followed by an effort to create a competitive marketplace in the coming years.
