Councilmember Kenyan McDuffie introduced a competitive online DC sports betting bill last week, potentially creating a path to a true marketplace.
The Sports Wagering Amendment Act of 2024 would allow for up to seven online skins, including one each for
- Audi Field
- Capital One Arena
- DC United
- Nationals Park
- Washington Capitals
- Washington Nationals
- Washington Wizards
The bill comes six days after Intralot signed an agreement with FanDuel Sportsbook to replace much-maligned GambetDC Sportsbook and provide sports betting services to the DC Lottery starting in the spring.
DC sports betting process angers rival
One rival sportsbook operator expressed frustration with the lottery over the DC sports betting process:
“It’s disappointing to see that it’s business as usual for the lottery in DC,” Brandt Iden, VP of government affairs for Fanatics Sportsbook, told LSR. “Although there’s no doubt that consumers in the district will be better off with a FanDuel product versus Gambet, it seems the lottery would have learned their lesson from four years ago when they did the initial no-bid contract.
“Having formerly been elected to office, I can assure you that citizens lose faith in their government when there’s no transparency. I certainly hope that the leaders of the city council will step in when the contract expires in June and work to open up a competitive market that benefits consumers.”
Background on no-bid contract
Intralot is in charge of sports betting in Washington DC, but not because it was proven to be the best option.
The DC Council approved Intralot as the Lottery’s sports betting supplier back in July 2019 without hearing from other companies about what they could offer. Intralot was and remains the supplier for the DC Lottery’s main lottery products, so handling sports betting as well was seen as the best way to get a sportsbook up and live in the shortest timeframe and to maximize revenue to district coffers.
Councilmember Jack Evans sponsored the bill to approve Intralot. His proposal suggested a standard procurement process would cost the District $60 million of missed revenue over 27 months.
Council voted to expel Evans on ethics violations
Evans, however, ended up in trouble over tangentially related ethics issues. Local outlets reported Evans received around $350,000 from a consultancy who lobbied on behalf of Intralot to get the contract.
The DC Council vote to expel Evans was unanimous, 12-0. One councilmember noted talking to Evans about council matters lead to him “speaking for the people who were buying him.”
McDuffie also upset with process
McDuffie explained in a statement why there should be online competition in the District:
“I’ve heard from frustrated residents these last few years about the lack of choice and competition in the sports wagering marketplace. Additionally, the abysmal performance and lack of revenue have proved that our program needs to be overhauled.
“For years, I have pressed the Office of Lottery and Gaming to make changes that would react to the needs of the marketplace and deliver on the promises to DC residents, but there was never any sense of urgency from OLG.
“I was incredulous when I learned that OLG waited until just recently, less than 6 months before contract end, to bring in a new platform operator. They’ve known this contract was expiring in July of 2024. Why didn’t they issue a new procurement that would have been in place at the contract end? It was a lazy move and an attempt to force this Council to settle for the status quo.
“My team has been researching other models and states. We’ve met with operators successfully performing in other states to assess their structures as we drafted this bill and believe we are proposing a model that can work for all stakeholders.”
Status of DC sports betting right now
Currently, BetMGM (Nationals Park) and Caesars Sportsbook (Capital One Arena) operate in-person sportsbooks.
Customers can also use those online apps, yet only when they are within a couple of blocks of the venues.
The hope is that a more competitive sports betting market would give the Capitals and Wizards more incentive to remain in the District, as opposed to going elsewhere.
FanDuel granted key waiver
The existing in-person sportsbooks believe it is unfair that FanDuel was granted a waiver regarding Certified Business Enterprise (CBE) requirements. Therefore, FanDuel does not have to have 35% of expenses go to a local business with the waiver.
In mid-February, BetMGM business partner, NBB Media Solutions, submitted a letter to the Department of Small and Local Business Development:
“As a successful existing DC CBE partner in the OSB industry, we (NBB Media Solutions, LLC) believe a waiver should not be granted in this instance as it would offer the new subcontractor an unfair advantage. If this waiver is granted it will every and directly affect my business and livelihood,” NBB Media Solutions owner Aprile Brown wrote in the letter, which was obtained by LSR.
McDuffie: There should be competition
McDuffie explained why “FanDuel’s sole-source solution is not a permanent solution” because it does not address concerns such as:
- Broader competitive options for the consumer
- Impact on existing businesses and stakeholders who have invested significant sums in retail sports books. This includes BetMGM, Caesars and CBEs who have built businesses on the promise of a fair, competitive retail market.
- Long-term resiliency for District revenues by a market shored up by multiple established operators
