D.C. Council Could Create More Sports Betting Competition Via Budget Process

FanDuel is currently the sole online sportsbook able to take bets throughout most of the district.

Geoff Zochodne - Senior News Analyst at Covers.com
Geoff Zochodne • Senior News Analyst
Jun 12, 2024 • 16:56 ET • 4 min read
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The effort to create a more competitive market for online sports betting in the District of Columbia could find success using a side door opened during the local council’s budget process, rather than relying on standalone legislation.

Members of the D.C. council met Wednesday to consider a budget-related bill and amendments, including one proposed tweak that would have nixed a competitive, district-wide sports betting measure.

However, most members vetoed that amendment, keeping the hope alive of the online sports betting market in the nation’s capital going from one operator authorized to take wagers almost anywhere to at least several. 

FanDuel is currently the sole online sportsbook able to take bets throughout most of the district. The Fiscal Year 2025 Budget Support Act of 2024 would alter that status quo, as it now includes the Sports Wagering Amendment Act of 2024.

Classing up the place 

The legislation would allow operators that run online sportsbooks in the district already, albeit confined to professional sports venues and the two blocks surrounding them, to expand their range to most of the district minus other sports venues and federal government property. That could allow “Class A” operators BetMGM and Caesars Sportsbook to broaden their accessibility in D.C.

The budget bill and its sports betting-related provisions would also create a new class of license for operators that could partner with D.C. sports teams and offer nearly district-wide wagering as well.

While D.C. is a relatively small market for legal sports betting, some on its council see an opportunity to realize more revenue and increase options for consumers. That follows the relatively disappointing performance of GambetDC, the local lottery's Intralot-backed platform, which has since been replaced by FanDuel.

The budget bill containing the competitive sports betting provisions still has a few hurdles to clear before it is law and operators can expand or enter the district. Wednesday’s approval brings that outcome closer, though.

Not all councilmembers are behind the effort. The chief concern voiced on Wednesday, by Councilmember Zachary Parker, was about process, as he objected to the sports betting provisions being shoehorned into a budget bill rather than standing alone. 

“There are three reasons to strike Subtitle R [the sports betting-related legislation] from the [Budget Support Act],” Parker’s proposed amendment stated. “(1) a change this important should undergo the normal legislative process; (2) revenue from the existing sports wagering contract is projected to exceed the revenue expected from Subtitle R; and (3) there are insufficient guarantees that the interests of small businesses who operate gambling kiosks are being protected under the new subtitle.”

Councilmember Kenyan McDuffie is the sponsor of the standalone Sports Wagering Amendment Act, which received a public hearing in May. McDuffie opposed Parker’s amendment, noting the current budget bill would allow the likes of DraftKings, ESPN BET, and Fanatics to apply for the new “Class C” licenses and gain entry into the local wagering market.

“But if you support this amendment, it would not allow for that opportunity,” McDuffie said. “In fact, any delays are effectively going to continue the sole source monopoly and be to the detriment of existing Class As who have a retail operation at Gallery Place and at [the Washington Nationals stadium].”

Kiosks for all

On the other two points of concern, FanDuel has been projected to generate $42.2 million more in revenue over four years compared to a prior GambetDC-only projection. The competitive market proposed by McDuffie’s bill has been estimated to provide the district with $26.88 million over the same four years. 

But with regards to the threat to small businesses with sports betting kiosks, McDuffie said he’s agreed to move another amendment to address any potential harm. That amendment, he said, would require the district’s Office of Lottery and Gaming to provide terminals using someone other than FanDuel within 15 days if they fail to provide them at a certain location on time.

“And I want to be clear, we want the contractors to honor their contract and provide the kiosks,” McDuffie said. “But we will protect our small businesses as we have in the past if they don't.”

Parker's amendment was defeated by a vote of 9-4 against the measure. The bill then passed unanimously on a voice vote by a committee of the whole.

The budget bill and its sports betting provisions still need approval from D.C. Mayor Muriel Bowser and will then be subject to review by the U.S. Congress.

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