A bill to expand the mobile sports betting market in Washington DC has been passed, meaning FanDuel will no longer enjoy its exclusive mobile sports betting access to the District.
FanDuel’s Impressive Debut
It was only a few months ago when FanDuel took over as Washington DC’s sole online sports betting provider at a 40% tax rate after the District’s abysmal four-year run with GambetDC that brought in just $4.3 million of the expected $84 million over that time. Bettors disliked virtually everything about the platform including non-competitive odds, causing them to turn to neighboring states with multiple platform providers.
However, FanDuel righted the ship quickly, generating a $30 million handle and revenues of $5 million in adjusted gross revenues over the first 30 days of operation after its launch on April 15th of this year. Contextually speaking, it was a stunning improvement from the same time last year as the data revealed an 887% spike in gross gaming revenue and a 673% rise in handle.
However, DC Council Member Kenyan McDuffie sponsored a bill, that has subsequently passed and been signed by Mayor Muriel Bowser, paving the way for multiple mobile sportsbooks to enter the market starting on July 15th. A 20% tax on gross gaming revenues with a $1 million application fee and a $500,000 annual renewal fee will be implemented on all sports betting operators.
The More the Merrier
BetMGM had limited access to the mobile market as its retail book inside Nationals Park allowed customers within the venue and extending two blocks outside the facility to bet digitally. Caesars also had the same agreement with the Washington Wizards with its brick-and-mortar sportsbook inside Capital One Arena. But now both operators will be operating unfettered throughout the District.
Other major sports betting platform providers like DraftKings and Fanatics have expressed interest in entering the market but they, like all new arrivals to the market, will be subject to a vetting process before they are allowed to launch. Any new operators would also be compelled to partner with a local professional sports franchise or venue.
Not Everyone Agrees
Although the mayor and many Council members approved the bill and welcomed new blood to the market, not everyone was on board with taking away FanDuel’s exclusivity, particularly after its exceptional performance since assuming the reins from GambetDC.
Melissa Davis, a spokesperson for DC’s Office of Lottery and Gaming, said her office “believes that maintaining a District-operated sportsbook as the sole mobile and online operator best accomplishes its mission to maximize revenue for the District.”
As for FanDuel, it appears the sports betting titan is prepared to walk away from its agreement with the DC Lottery and the 40% tax rate. It will likely enter the market as any other provider by partnering with a local sports team or venue and paying half in taxes.
The President of FanDuel Group, Christian Genetski, penned a letter to DC Council chairman Phil Mendelson last month in anticipation of the expanded market, stating, “Should Subtitle R be enacted, FanDuel will transition its operations in the District under its Class A license under the new regime consistent with its pre-existing contractual relationship, and invoke its termination right under the subcontract (with Intralot).
“As a result, FanDuel (i) will no longer pay 40% of GGR to OLG, (ii) will instead pay a license fee and a 20% tax on its sportsbook wagering revenues going forward, and (iii) will no longer support the retail kiosks at DC small businesses. Any District-wide sportsbook operations by OLG would no longer have participation from FanDuel.”
