Washington DC’s sole mobile sports betting provider, FanDuel, has sent a shot across the bow to the City Council president, threatening to terminate its operation if the Council votes to allow other operators into the market.
Big Numbers
FanDuel has facilitated a remarkable turnaround in the Washington DC mobile sports betting market since taking over for the disastrous in-house GambetDC in April that operates the Office of Lottery and Gaming (OLG) mobile sports betting platform.
Consider that in its first 30 days of operation FanDuel reported a handle of $30 million, which produced $5 million in adjusted gross revenue. This delivered $486,071 in tax revenue for the District in May.
Now compare that to the previous year-over-year numbers when GambetDC was operating as the District’s only mobile sports betting provider and you will see a stunning 673% rise in handle and an even more impressive 887% increase in revenue.
Not So Fast
FanDuel has proven to be a substantial upgrade from the previous platform but rumblings that the City Council may open the market up to other national platform providers do not sit well with the powers that be at FanDuel.
According to industry reports, FanDuel president Christian Genetski sent a letter to Washington, D.C., Council Chairman Phil Mendelson in advance of the 2025 budget announcement in which his company would “invoke its termination right” to cease operations in the District of Columbia should the Council change the agreement to allow multiple mobile operators.
The company also said that it “remains committed to providing D.C. residents with a best-in-class sports betting offering under its current contract with the Office of Lottery and Gaming, while also maximizing revenue to the District under that agreement.” This is assuming, of course, that the Council maintains the status quo and allows only FanDuel as its lone sports betting platform through the Office of Lottery and Gaming (OLG).
But not everyone subscribes to the “more is better’ axiom in terms of opening up the District’s sports betting market at the OLG. “The FanDuel change has already brought back more than 15,000 active users to the District that were placing their bets in bordering states and has increased the average wager by almost six times the GambetDC average,” said Frank Suarez, executive director of the OLG, in written testimony.
Raising the Rate
Another concerning piece of news for mobile sports betting platforms in the DC area revolves around a discussed tax hike from 10% to 20% on adjusted gross revenues as well as a $1 million license fee followed by renewal fees of $500,000 after five years. Although FanDuel is the only district-wide mobile option, there are surrounding sports facilities with retail sportsbooks from other operators besides FanDuel that also have a small two-block radius of mobile betting from the venue.
Dan Shapiro, senior vice president and chief development officer of Caesars Digital, talked about how it would affect his company’s operations in the District. “In this case, we’re talking about increasing the license fee and the tax rate, which is [a] double whammy on us,” he said. “It’s all a math equation for us, and you’re changing the dynamic here.”
“We will support mobile sports betting, but it’s the retail aspect we have serious concerns about. The tax rate should be left at 10% so we can continue to invest in the District,” Shapiro added.
