On Tuesday (25 June) the DC Council gave final approval to its FY2025 budget that includes a provision to open the digital sports betting market. Currently, FanDuel is the sole platform available citywide but, under the new budget, that will change.
The new budget required an emergency act to avoid having to send the budget to congress for approval. The DC Council passed the Budget Support Act via voice vote. The budget is set to go into effect on 15 July.
The new budget will allow for commercial operators to enter the market. BetMGM (Nationals Park) and Caesars Sportsbook (Capital One Arena) should quickly be able to expand their current digital offerings. Through existing partnerships, the operators have brick-and-mortar sportsbooks and offer digital betting within an exclusion zone. Under the new plan, they will be able to offer their platforms across the District.
FanDuel in April launched its platform in partnership with the DC Lottery. The company currently has a monopoly. But, on 5 June, FanDuel president Christian Genetski wrote to the DC Council saying it would abandon its lottery deal if the market opens. The lottery announced earlier this year that its contractor, Intralot, had decided to subcontract with FanDuel for wagering. FanDuel replaced the lottery’s poorly performing GamBetDC platform.
Under the lottery deal, FanDuel is paying a 40% tax rate for the privilege of having a monopoly. Under the new plan, operators will pay a 20% tax rate.
For operators, open market is a big win
Operators have been pushing for an open market for several years. Council member Kenyan McDuffie, who voted against a sole-source market in 2019, also wanted competition. Fanatics Betting & Gaming vice-president of government affairs Brandt Iden was able to bring operators together to present a united argument that McDuffie was able to sell.
The DC budget vote represents a key win for operators.
“For years, this market has been held together by a thread and some silly putty,” Iden told iGB. “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 sole-sourced closed markets.”
Prior to the vote on the budget, there was discussion about the sports betting section and an amendment aimed at protecting small businesses was approved, 10-1. The amendment would help to guarantee that lottery partners like convenience stores or bars will continue to have betting kiosks.
Lottery partners were previously able to have GamBetDC kiosks. FanDuel committed to replacing those with their own. But there has been concern among council members that with the latest change, the businesses might see a gap in service or that commercial operators might decline to offer kiosks.
In testimony earlier this year, several major operators said they would be interested in providing kiosks when they join the market.
Existing platforms likely to be first to expand
It is likely that BetMGM, Caesars and FanDuel would be the first to be available across DC, since they are already operating. But other major operators, including DraftKings and Fanatics, have expressed interest in entering the market. Representatives from both operators testified earlier this year that they want to be in DC and are interested in opening physical sportsbooks, as well.
New operators will have to go through a vetting process before they are allowed to go live. BetMGM and Caesars are already approved to offer online sports betting, meaning their process to take their platforms into wider access should be streamlined. FanDuel, it appears, is positioned to seamlessly continue offering District-wide access.
Prior to the vote, DC was one of six single-operator markets. Of the remaining five, four are regulated by and/or offered in partnership with state lotteries. The fifth is Florida, where the state and Seminole tribe compacted to give the tribe exclusivity.
