DC sports betting continues to founder under GambetDC, though the DC Lottery continues to ask for more time to prove its case.
DC Councilmember Kenyan McDuffie questioned members of the Office of Lottery and Gaming during a Budget Oversight Hearing Thursday. The hearing did not include much positive information for the Lottery’s sports betting efforts.
The Lottery forecasted $6.2 million in DC sports betting funds to be transferred to the District during fiscal 2021. With four months left, that transfer total is just $230,000. That $6.2 million forecast was already lowered once from $22.6 million.
That does not bode well for the $20.4 million forecast for fiscal 2022. But Ridgely Bennett, interim executive director of the Office of Lottery and Gaming, maintains cautious optimism GambetDC could still succeed:
“We’re premature in making final determinations because we have not had an opportunity to get our whole program up and running.”
DC sports betting optimism not contagious
Bennett said the pandemic threw off GambetDC’s plans but there’s no reason to worry yet:
“What we believe will happen now that the city is opening up, now that sporting events are actually occurring, is that you’ll see how that model will bring in a significantly greater revenue to the district than what the privately-operated sports wagering will do.
“But once again we’ll have to see, but that’s how the program is designed and we are still confident in the model.”
Councilman losing faith
McDuffie, who strongly questioned the potential success of GambetDC in a March hearing, did not share Bennett’s optimistic outlook:
“I am admittedly less confident than you are in the model, I gotta tell you, but I don’t claim to know as much about this as you. But as I continue to delve deeply into this and my staff, who has spent a significant amount of time looking at Gambet, looking at William Hill, looking at Virginia, Maryland, looking at other places around the country, as I get that information from staff I gotta tell you my confidence isn’t growing, it isn’t improving.”
That is probably because McDuffie is looking at hard facts instead of trying to keep afloat a quickly sinking ship. While Bennett argued DC sports betting launched at the worst possible time, McDuffie countered with other jurisdictions that are doing just fine despite similar launches. He also specifically noted the success seen by William Hill in DC.
“I do see the trends in other jurisdictions and it makes me wonder if we’ve gone about this the right way,” McDuffie said.
Still waiting on DC sports betting audit
The current model only gives the Lottery full access to the District via its mobile app. That District-wide access does not include areas blocked by the federal government.
Commercial operators like BetMGM and William Hill pay a 10% tax for mobile access that covers a two-block radius from their arena or stadium partners. They also get a retail sportsbook at those locations.
The other option is to allow commercial operators full mobile access to the District with a 20% tax on sports betting revenue. The Office of the DC Auditor was required to take a deep dive into the market to see if the current model was the best option. It missed the legislative requirement to complete it by the beginning of May.
That report should be finished by the end of the month with results published sometime in July, DC Auditor Kathy Patterson told LSR.
Retail coming soon, FanDuel applies
There are two significant changes coming to the DC sports betting market, one sooner than the other.
With COVID restrictions now lifted, the rollout of retail spots betting is coming, Bennett said. Regulations will be out within a week and will be followed by a phased approach of five to 10 social settings with three to five kiosks each, he said.
Those kiosks will have a transaction and payout limit of $600. That means anyone winning more than $600 has to visit the Lottery’s prize center for payment.
BetMGM, the only other private operator alongside William Hill so far, launched its mobile app last week. Its retail sportsbook should open during the summer at Nationals Park, Bennett said.
Intralot overpriced odds could be changing
McDuffie pointed out a few items about the GambetDC operation that are not perfect. He noted the low app rating and questioned why other sportsbook apps were available on the Google Play store but not GambetDC.
He also pointed out how many bettors chose the retail William Hill sportsbook over GambetDC. That included waiting in long lines around the block McDuffie personally saw on multiple occasions.
Those lines were mostly caused by GambetDC’s over-juiced odds. McDuffie brought the non-competitiveness of those odds up as well, which Bennett said could be changing:
“Currently, the contract has 80% has to pay out in it. That’s adjustable and we’re looking to see if that needs to be adjusted.”
Is GambetDC like an expensive soda?
Bennett called sports betting basic business, like “selling a can of Coke” to get the best profit.
Selling it at a penny would result in a loss. Selling it at 30 cents might make a bit of a profit but there are still enough people to buy it at 45 cents to make the most, Bennett explained.
Clearly, though, GambetDC is pricing its soda too high for the market. Intralot‘s operation has just $37.8 million in handle and $6.9 million in revenue since launch last May.