DC SPORTS BETTING COULD BENEFIT FROM CHANGE

Washington DC sports betting is back in the news with the hope that the market will soon see some improvements. The hope is that sports betting in the state will have more competition as well as better lines.

A much anticipated report from the Office of the District of Columbia Auditor released its findings this past Thursday. The report found that Washington DC sports betting would be able to benefit from more competition as well as better lines, as previously written. These were the primary findings from the ODCA report.

GambetDC did not fare very well in the findings from the report. The main discovery is the fact that when its performance was compared to results in other states as well as the performance of the Caesars sportsbook in DC, GamBetDC did not stack up.

The audit from the Office of the District of Columbia Auditor was required to be performed under the law that legalized DC sports betting. However, the report has faced multiple delays. It has been over two years since Intralot was approved as the DC lottery provider by the DC Council for a mobile app monopoly. This was done so without any bidding process in the country’s capital.

GamBetDC is not making the sports betting revenue that analysts believe it should be. In the nine month period ending in March 2021, GambetDC made DC only $444,000 in tax revenue. During that same period, Gambet managed to deliver $4.4 million in NGR. Almost $4 million of that revenue went to Intralot, the monopoly provider.

To demonstrate the comparison to other providers, over a period of five months, the Caesars retail sportsbook in operation at the Capital One Arena in DC was able to generate more than three times that revenue as well as three times that tax contribution.

And, that is also how the comparison looked when bringing other states into the equation. The New Hampshire sports betting operation that is run by DraftKings made around ten times the revenue that Gambet was able to, while having on twice the population.

Open market sports betting states, like Illinois and Colorado, were also able to take in much larger revenues during similar timeframes.

Kathleen Patterson, one of the auditors, offered up six avenues for the Office of Lottery Gaming (OLG) to improve upon the DC sports betting returns. They are:

• To built out a GambetDC retail network
• To grant new licenses to even more private sportsbook operators
• To increase the 10% taxation rate on GGR
• To renegotiate the terms of the agreement with Intralot to remove the Office of Lottery Gaming’s obligation to pay for advertising costs as well as bonusing costs
• To reduce vig in a bid to incentivize wagerers to place bets
• To improve the user experience on the GambetDC app and to resolve any technical problems the app has had

The audit found that DC sports betting should have the potential to generate revenue that is comparable to other states with legal sports betting. So, hopefully the above options and others listed in the ODCA’s report will be considered to improve DC sports betting and its revenue.

However, at first at least, the Office of Lottery Gaming has put up some resistance to these recommendations. When it comes to the subject of competition, the OLG has argued that the DC sports betting market is already picking up steam. This can be demonstrated by the fact that BetMGM has recently launched in the area, with FanDuel not far behind on its DC launch.

Sportsbooks in DC are only able to take mobile bets within a two-block radius of their respective retail locations. So, this could be another hindrance to DC sports betting and its revenue.

But, the auditor did not suggest at this time the idea that private sportsbooks should be able to launch full mobile sports betting without these tethers in the area. And, DC law actually allows this to be a viable option.

The Office of Lottery Gaming is also cautious when it comes to the idea of bringing in more sports betting operators. This is because the cost of regulating these new sportsbook operators exceeds the revenue generated by licensing fees that are collected from the license applicants. So, the Office of Lottery Gaming hopes to use the revenue from GambetDC to make up for this shortfall.

In addition, the Office of Lottery Gaming also seems cold on the idea of reducing the large vig from Gambet. Which means, improved DC sports betting odds may not be coming any time soon. However, the OLG as well as Intralot will continue to review payouts as well as to make any necessary adjustments to remain competitive in the DC sports betting marketplace as well as to try to bring in as much revenue as possible to the area.

Considering the fact that DC sports betting has underperformed, it is not certain what would bring about change from the Office of Lottery Gaming. But, the OLG has conceded that it is continuously trying to improve the GambetDC technology.

It does appear that the Office of Lottery Gaming is not extremely troubled by the issues GambetDC has seen. And, this also applies to the findings of the recent audit. But, if the performance does not improve soon, this could be set to change.

Written by Allie Nelson, our US Sports Betting Industry expert. You can learn more about our author's expertise here.