After years of complaints from users, a service interruption during the Super Bowl, and a loss of $4 million in one year, the District of Columbia has had enough.
A group of city council members, led by Elissa Silverman, introduced legislation Monday that would drastically change the landscape of the District's sports betting service, opening the door to some of the major names that sports betting in Virginia already offers.
DC council members seek to “reboot” the District’s troubled online sports wagering program by allowing mobile apps such as FanDuel and rival DraftKings to compete for business alongside the D.C. Lottery's poorly performing GambetDC app.
Gambet Monopoly Not Working Out For D.C.
Currently, GambetDC is the only app allowed to operate in the District, except in stadiums and retail establishments that are licensed separately to offer sports betting.
The council's new bill introduced Monday would also prevent a contract renewal with GambetDC's developer Intralot. That company is based in Greece.
Intralot was awarded an exclusive deal worth $215 million in 2019 to develop a sports betting app for the city. Intralot was already running the DC lottery for the city. Both services have become “highly controversial” over the past few years, Silverman said in a news release.
The District’s sports betting program was supposed to be a bonanza, contributing approximately $25 million per year to the District’s budget, according to a press release from Silverman. Instead, it has been a dud — actually losing $4 million in its first full year of operations.
Council Speaks Out on ‘Embarrassing Episode’
“We need to turn the page on this embarrassing episode,” Silverman said in the release. “Residents deserve an online app that works, taxpayers deserve a program that brings in money for the District, and we all deserve a system where we don’t hand huge contracts to a preferred company and its subcontractors without even looking at the competition.”
Silverman was one of five council members who voted against the sole-source contract with Intralot rather than following many other jurisdictions that launched with open competition among proven providers such as FanDuel Sportbook, DraftKings, BetMGM, Caesars, PointsBet and the like.
The contract and enabling legislation created an exclusive market for Intralot’s sports betting GambetDC app in the city, except around venues such as Capital One Arena and Nationals Park. Those sports venues have licensed sportsbooks of their own.
GambetDC is “bringing in less money than it has spent and is operating at a loss,” Silverman said.
Virginia Sports Betting Giving Good Example in Market
Meanwhile, neighboring states are competing for sports betting customers with very healthy revenue numbers. In 2021, Virginia sports betting apps launched in an online-only market (there were no physical casinos in the state at the time). And Maryland is poised to launch its program as soon as Nov. 21.
Virginia has 13 mobile wagering operators, and there is also one retail location at Hard Rock Hotel & Casino Bristol. Maryland is set to award up to 30 retail facility licenses and 60 mobile licenses for sports betting.
The Maryland Lottery and Gaming Commission released a list of online sports wagering operators seeking a license in the state. They include major national players such as DraftKings Sportsbook, FanDuel, BetMGM, Caesars, PointsBet, BetRivers and Barstool Sportsbook, plus Betfred, Fanatics Sportsbook and Parx Interactive.
Mobile Sports Wagering in Maryland Close to Launch
Maryland also has retail sportsbooks at five of its commercial casinos and three other locations. They can boast pairings with a major sportsbook partner — for instance, BetMGM Sportsbook is at MGM National Harbor.
Turning our attention back to the District, Silverman’s Sports Wagering and Fair Competition Amendment Act of 2022, would:
- Allow any company to apply for licenses to operate online and mobile sports betting apps in the District, with a 15% tax (same as the rate in Virginia and Maryland);
- Terminate the contract with Intralot in 2024, when it expires, instead of exercising an option to renew;
- Require competitive bidding for future contracts to run the District’s lottery system and sports betting operations; and
- Get serious about profitability, requiring bidders for those contracts to reasonably show how they would make money for the District.
Intralot has a hard time competing with even the limited arena sportsbooks much less the Virginia sportsbook promos available via mobile devices nearby. The peak for D.C. sports betting handle (or amount wagered) was $26.3 million in October 2021. Virginia exceeded $400 million in handle six months in a row starting in October 2021.
“If we’re going to have a lottery and a sports betting program, let’s at least make it a revenue generator for the city so it can fund important efforts in public safety, public education, and housing,” Silverman said. “And let’s stop the bad practice of awarding lucrative contracts without competition.”