On Tuesday afternoon, lawmakers in the District of Columbia passed a bill that legalizes sports betting within its boundaries.
The Sports Wagering Lottery Amendment Act of 2018 rewrites the DC books to permit both retail and online/mobile sports gambling. The DC sports betting bill is subject to Congressional review, but an emergency measure also passed separately to allow for preparations in the interim.
The signature of Mayor Muriel Bowser is now the last immediate hurdle remaining, and she is not expected to veto the bill.
Lawmakers pass DC sports betting bill
The relevant bill (B 22-944) came up for its hearing midafternoon, with the sponsor presenting his proposal.
“We’re venturing into new territory with sports gaming,” Councilmember Jack Evans said. “I’m very excited that the District will be out of the box if this passes today.” He reiterated his desire to beat surrounding states Virginia and Maryland into the market.
Proceedings in the chamber were complicated slightly by the addition of three amendments, two of which did not appear critical to passage. One was important to operators, though: a proposal to leave data requirements to regulatory rules rather than burn them into the law’s language. The third (and seemingly most pivotal) amendment centered around the inclusion of disadvantaged and minority-owned businesses.
Although it passed, support for DC sports betting was not unanimous. Councilmember David Grasso provided the primary voice of opposition, citing concerns about problem gambling and mental health. In the end, the vote tally was 11-2.
The emergency bill now moves to the mayor for approval, while the permanent bill will go to US Congress for a 60-day review.
What will DC sports betting look like?
At its roots, DC sports betting will follow a lottery-operated framework similar to Delaware sports betting. The existing agency (District of Columbia Lottery and Charitable Games Control Board) will be rebranded as the new Office of Lottery and Gaming and charged with regulating and administering the industry.
In practice, though, the District’s product will look nothing like the ones in Delaware or Rhode Island (or any other state’s so far.)
As passed, the bill authorizes both land-based and online/mobile sports betting, which sets it off on a firm footing. A reasonable tax rate of 10 percent on revenue also suggests an effort to foster a competitive marketplace. Ten percent is on the lower end of the scale among states with legal sports betting — particularly lottery-based states.
The bill does not exclude betting on any particular sport or league, so regulations will determine those specifics. Folks directly involved in sports; however, like athletes and coaches, are not permitted to wager on their own league.
Mobile betting will primarily be offered through the lottery’s platform, powered by Intralot. There are, however, some apparent exceptions.
Class A licensees
In addition to District-wide mobile betting, the law authorizes retail sportsbooks inside four sports venues:
- Capital One Arena
- Audi Field
- Nationals Park
- St. Elizabeths East Entertainment and Sports Arena
These “designated facilities” are the only ones allowed to obtain Class A licenses.
Capital One Arena is home to the local NBA and NHL franchises, and the hometown MLB team plays its games at Nationals Park. The two other facilities host smaller professional leagues — MLS at Audi Field and WNBA at St. Elizabeths East. Interestingly, language that would have included the aging RFK Stadium in the above list was stricken.
The current language is somewhat vague, but each appears to be permitted to offer on-site mobile betting using either in-house or third-party platforms. That language reads like Mississippi‘s version of mobile: on-site only.
Each will enjoy a two-block exclusivity zone, inside of which no competition is allowed. These licenses cost $250,000 apiece and are valid for five years.
This provision should be especially enticing for local mogul Ted Leonsis, who owns the two pro teams that play at Capital One. In recent months, Leonsis has become a vocal proponent of bringing sports and gambling together inside arenas and stadiums.
Class B licensees and retail
Outside those zones, other establishments may apply to offer wagering as Class B licensees. They receive the same options as Class A facilities, minus the two-block exclusivity.
Class B sports betting licenses are also valid for five years, but they come at a discounted cost of $50,000. More limited two-year retail licenses cost $5,000 apiece.
Incidentally, the District occupies 68 square miles of terrain — or around 7,000 total blocks.
How did DC sports betting come to pass?
The idea of DC sports betting first appeared publicly in mid-September when Evans indicated he would present his proposal to the Council.
Things happened quickly in the months since. Here’s the timeline from start to finish:
- Sep. 18: Evans publishes a press release indicating he has filed a sports betting bill (B 22-944).
- Oct. 2: The sponsor offers additional details, expressing openness to in-arena betting and integrity fees.
- Oct. 17: About 15 stakeholders testify during a public hearing, each working to shape the final version of the bill.
Pretty standard stuff so far. But then things started to get interesting:
- Nov. 27: The night before the bill’s first committee hearing, Evans proposes amendments that include payment of an integrity fee to sports leagues. His goal is to trade those fees for the use of official league data.
- Nov. 28: Nobody supports the proposal. The committee pushes back hard on the royalty fee, removing that section before advancing the bill to the full Council.
- Dec. 3: In what would have been an unthinkable union a few months ago, leagues and operators team up to lobby for a new “license fee” akin to the royalty/integrity fee. They make no provision for data usage in exchange.
- Dec. 3: That lobbying alliance unites to push back against a proposed single-operator model administered by Intralot. A document obtained by LSR reveals that Intralot is wildly exaggerating its revenue projections, and reporting from District Dig raises questions about Evans’ motives.
- Dec. 4: Evans’ bill advances through its first reading by a 10-2 vote. The single-operator model sticks.
And on Dec. 18, the bill passes, barring any pushback from the mayor or Congress.