D.C. Council Takes Steps To Open District’s Online Sports Betting Market to Multiple Operators

Apr 28, 2024; Washington, District of Columbia, USA; Washington Capitals left wing Alex Ovechkin (8) shoots the puck as New York Rangers defenseman Jacob Trouba (8) defends in the third period in game four of the first round of the 2024 Stanley Cup Playoffs at Capital One Arena. Mandatory Credit: Geoff Burke-USA TODAY SportsThe Washington, D.C. City Council today approved a budget that will bust the online sports betting market monopolyThe budget will allow for several new sports betting operators in the District starting July 15FanDuel is the only current operator allowed in the District through a partnership with the D.C. Lottery

The Washington, D.C. Council today approved the District’s fiscal year budget, which includes language to lift an online sports betting monopoly that has existed for more than four years.

Council members unanimously approved the District’s FY 2025 budget, which will allow additional sports betting operators to do business in D.C. starting July 15. The budget will have to be signed by the D.C. Mayor and be approved by Congress before becoming law.

With this new budget, the city council will allow its existing Type-A sports betting license holders to offer online sports betting throughout the District and operators to apply for newly created Type-C licenses.

Opening up D.C.’s Sports Betting Market

In a surprising move, language from Council Member Kenyan McDuffie’s Sports Wagering Amendment Act of 2024 was included in the budget by Council Chair Phil Mendelson, as opposed to the bill going through the typical regulatory process.

Despite objections from several council members, Mendelson explained the bill’s language could be included in the budget as it dealt with District revenues. An open sports betting market is best for competition, Mendelson explained, and Washington, D.C. is an outlier from other legalized sports betting districts as the vast majority allow for more than just one legal operator.

Since launching online sports betting in May 2020, Washington, D.C. has only allowed one online sports betting app to do business District-wide. Intralot, through a partnership with the lottery, launched GambetDC in May 2020 as the District’s first sports betting operator, but the app was scuttled this past April after horrendous returns in favor of a new deal with FanDuel.

The contract between the Washington, D.C. lottery and Intralot runs until mid-July and the lottery has requested a two-year extension with the company.

Language from McDuffie’s bill will essentially open Washington, D.C. up to seven online sports betting skins. A new classification of sports betting license, a Type-C license, will allow sports franchises in the district to partner with one sports betting operator to conduct online sports betting.

Sports franchise that plays 90% of its home games in the district will be eligible for a Type-C license. This will leave the following franchises and stadiums eligible for one of the new types of sports betting licenses.

Audi FieldCapital One ArenaDC UnitedNationals ParkWashington CapitalsWashington NationalsWashington Wizards

The budget will tax Type-C license holders at a rate of 30% of gross gaming revenue. A Type-C license would cost $2 million to acquire for five years and a $1 million renewal fee after that.

It also calls for an increase of the retail sports betting tax rate for Type-A license holders from 10% to 20% of gross gaming revenue.

Under the current law, retail sports betting is allowed at designated professional sports arenas and stadiums in the district for Class-A license holders. Caesars Sportsbook hosts a retail sportsbook at Capital One Arena, FanDuel hosts a retail sportsbook in Audi Field, and BetMGM hosts a retail sportsbook in Nationals Park. BetMGM and Caesars Sportsbook can only offer online sports betting to customers who are within a two-block radius of their retail sportsbook.

These Type-A license holders, under the new budget, will be able to offer online sports betting throughout D.C.

“The operators want to participate in the market, they want competition. Operators like BetMGM, Caesars, and even FanDuel, along with the sports teams they partnered with, all encouraged the committee to open up the city to mobile sports betting competition when we first discussed this,” McDuffie said.

Approval Not Without Controversy

Council Member Zachary Ward introduced an amendment to the budget during discussions to strip the sports betting language from the document. Why, he asked, should the language be included in the budget and the bill not go through the normal regulatory process?

Several council members agreed with his sentiments. Council Member Brianne K. Nadeau supported his amendment, noting it was bad practice to make members either support the budget or oppose sports betting. Nadeau said she has not supported sports betting throughout the legalization process and does not support it being included in the budget document.

“I do not like that I’m being asked to vote on this as part of the budget package,” she said.

Ward’s amendment was defeated by a vote of 4-7.

The budget will be heard again by the council next week. It’s likely to be approved yet again before being sent to the Mayor.