The District of Columbia could be the next US jurisdiction to roll out a legal, regulated sports betting industry.
During a scheduled legislative meeting on Tuesday, lawmakers voted 7-6 in favor of a proposal to bypass competitive bidding for the DC Lottery contract. A second reading and another vote will be conducted later this month.
Passage could help expedite the launch of DC sports betting under the city’s currently lottery supplier, Intralot. Assuming no delays in negotiations, officials expect to launch a live product before Sept. 1.
The bill narrowly escaped a committee stop last week, advancing onto the floor by a similar one-vote margin.
No-bid DC sports betting contract
Councilmember Jack Evans sponsors the bill, armed with data from a controversial study to support claims that the standard procurement process would cost the city $60 million over 27 months of missed revenue.
Speaking before the Committee of the Whole, Evans listed the Monday shooting of four people in DC among his reasons to expedite the contract.
“I urge my colleagues to support this bill today, given the beneficial impact that the speedy passage will have on the District — and keeping in mind that a portion of the money goes to violence prevention.”
Provided it submits a reasonable proposal, Intralot would be the sole supplier of the District-wide mobile betting platform. Passage essentially shuts out its two primary competitors — IGT and Scientific Games — as well as dedicated sports betting suppliers unable to provide an end-to-end lottery solution.
While expedited sourcing may allow quicker entry into the market, questions remain over how competitive the product would be as the US sports betting industry matures.
Speed vs. competition
Additional DC sports betting permits will be available to a number of other venues in the city (including sports arenas) but each will be geofenced to its own property. Products like DraftKings Sportsbook and FanDuel Sportsbook — which drive New Jersey sports betting revenue — will not be available throughout the city.
That has some lawmakers wondering whether or not a single-source operation is the most profitable path forward. Here’s Councilmember Elissa Silverman, reiterating her previous “agita” over roping sports betting into the lottery contract:
“I share our chief financial officer’s desire to get sports betting up and running as quickly as possible, because we can benefit from that additional revenue. But I still think we need to have a lottery contract process — especially in light of what happened with the lottery the last time — that our residents actually have confidence in …
“I think there are both good governmental and practical advantages to separating the two contracts, at least at the beginning.”
Silverman was among the six members of the council that voted against the proposal.
In its own proposal to the DC Lottery, Intralot indicated that it expects to hold 20-30 percent of betting handle. By that math, as much as $17.50 of every $100 wagered could wind up in the DC General Fund.
DC sports betting backstory
A small and complicated jurisdiction, every story about DC sports betting requires a bit of contextual backstory.
The Council passed the primary bill to legalize DC sports betting last December, and Mayor Muriel Bowser signed it last month. Like all such DC bills, it then headed to (and currently sits with) US Congress for a 60-day review.
An emergency bill passed in tandem, however, which sidesteps the review to allow for additional preparations in the interim. Among those preparatory bills is this Bill 23-25, moving to secure a supplier for the lottery’s sports betting operations on the fly.
Speed has become the primary focus for city policymakers, repeatedly citing the need to beat neighboring Virginia and Maryland into the market. Controversy surrounding Intralot and the DC Lottery dates back to 2008, however, causing some lawmakers to take pause at Evans’ proposal.
Here’s more recent reading about DC sports betting: