If you ask the DC Lottery, the biggest problem with its Intralot-powered GambetDC sportsbook is a lack of available customers.
The Lottery’s interim executive director Ridgley Bennett blamed the pandemic and a lack of commuters for GambetDC’s underperformance so far in a hearing Wednesday before the DC Council’s Committee on Business and Economic Development.
GambetDC forecasts fall
GambetDC was forecasted to bring in $9.6 million to the DC Lottery in fiscal 2020, which ended Sept. 30. In reality, there was just $352,000 transferred, according to Agency Fiscal Officer Craig Lindsey.
There was originally $22.6 million forecasted from GambetDC for fiscal 2021, though that’s now been dropped to $6.2 million.
Private DC sports betting operations missed fiscal 2020 projections as well – $1.3 million projected vs. $273,000 realized. That segment’s forecast for fiscal 2021, though, has been increased to $2.5 million from $1.8 million.
Future years affected too
GambetDC projections for fiscal 2022 through fiscal 2024 also saw an average drop of $5 million each year.
Those revisions reflect how those segments are currently performing, Lindsey said.
“Based on what’s actually occurring is what determines the type of adjustment to the revenue projections,” Lindsey said. “So if the revenue is trending upward, the projection once it’s recalculated is going to trend upward. Conversely, if it’s the opposite direction, that projection’s going to go down.”
Excuses for GambetDC fall short of reality
Anyone paying attention since Intralot launched US sports betting knows why GambetDC is failing to generate handle like its competitors: its wildly juiced odds.
Bennett offered an amusing list of reasons why that is:
- “We have learned that people enjoy going to the retail-based sports betting location.” He then went on to confirm that mobile betting “highly outweighs” retail in other jurisdictions.
- William Hill is an established brand whereas GambetDC is a new brand: “William Hill started with an established player base. We have to build a player base.” Both, of course, were brand new to the market when they launched, though the Lottery should have had a big advantage with a mobile platform plus a database of lottery players. GambetDC also had a long head start.
- People don’t like turning on their geolocation services to allow betting on GambetDC app.
Councilmember Kenyan McDuffie asked about GambetDC’s ratings on the iOS App Store (1.5 out of 5 based on 213 ratings) but didn’t get an answer.
Sports betting costing DC money so far
There’s been about $1.3 million in licensing fees and another $1.2 million from betting proceeds, Lindsey said. That $2.5 million in revenue does not cover the $2.6 million in costs so far.
Some of those start-up costs will fall off, Lindsey said, while other costs are related to the regulation of sports betting.
GambetDC has nearly 20,000 players registered, which is lower than initial projections. Bennett, again, blamed the pandemic and called it “the worst of times to introduce a new sports betting product.”
BetMGM working through application process
Another big competitor in BetMGM could be approved to launch sports betting in DC by this summer or earlier.
Its application to operate retail and mobile sports betting through a partnership with the Washington Nationals was accepted last month and a scope of licensing hearing was held last week.
Given the roughly six months it can take to get a license approved, McDuffie asked the Lottery’s Director of Regulation and Oversight Peter Alvarado if August was a good target for BetMGM’s launch.
“Probably sooner,” Alvarado said. “For some of the applicants it depends on what their operational plan is. Are they going to put an operational plan where they’re going to offer mobile, betting windows, self-betting terminals? If they offer all three, it can take longer. If they only offer one, if they only offer a mobile app, it may take a significantly shorter amount of time because that has less requirements.”
Another hopeful operator, Class B applicant Grand Central, should get a ruling soon, Bennett said.
Allow more mobile operators for GambetDC competition?
McDuffie also asked Bennett his thoughts on potentially allowing more district-wide mobile operators.
“We are going to return more to the District than privately operated,” Bennett said. “That’s because 50% of the gross gaming revenue from District-operated sports betting will go to the District approximately. And you’re only generating 10% of the gross gaming revenue from privately operated.
“Our statute does require us to review that. If we do go to a model where privately-operated can run district-wide sports wagering, that tax rate would go up to 20%. But still, the revenue that would be generated, it’s predicted that we would generate much more revenue.”
That answer was not easily accepted by McDuffie:
“To be fair, though, it was predicted that we would generate much more revenue before. And it looks like we’re not generating the revenue that was originally predicted.”
District-wide retail betting coming this summer
The decline in projections for GambetDC do not include what retail betting will bring to the table, Bennett added.
The process to add sports betting at lottery retailers is already underway. The initial launch was supposed to be this spring, though that was pushed back.
The first phase will see 10 to 15 retailers get sports betting at first. Those stores could launch as early as May if the rulemaking process goes fast enough, Bennett said.