DC betting delayed over DC Lottery, Intralot concerns

9 January 2019

The launch of legal sports betting in Washington DC is set to be delayed after emergency legislation designed to fast-track its implementation was dropped.

An emergency resolution that would have enabled the Sports Wagering Lottery Amendment Act to be implemented within months was withdrawn by DC City Council chairman Phil Mendelson on Tuesday.

The new law will now proceed as standard legislation, meaning a public hearing will be held later this year. This hearing will examine matters such as whether the DC Lottery should be allowed to gift its sports betting technology supply contract to Intralot without running a procurement process.

The Sports Wagering Lottery Amendment Act, as it stands, would hand an effective mobile wagering monopoly to the DC Lottery's Intralot-powered platform. Opposition to "sole sourcing" within DC, however, has seemingly led to a delay.

Backers of the DC Lottery-Intralot platform had pushed for quick resolution, suggesting it could take up to three years for a full tender process to be completed. DC City Council chief financial officer Jeff DeWitt, in a letter sent to lawmakers earlier this week, said his analysts estimate DC could lose $60.9m in sports wagering revenue between 2019 and 2022 while this process is carried out.

Supporters of sports betting had hoped that it could launch before the start of the Major League Baseball (MLB) season in April. That now looks unlikely with a full hearing and possible procurement process to be scheduled.

In a DC City Council meeting on Tuesday, amendments to licence fees proposed by Councilmember Kenyan McDuffie were voted through by councilmembers. Operators who do not partner with local Certified Business Enterprises (CBEs) will now pay twice as much in fees, with the top level licence potentially doubling to $500,000.

The Sports Wagering Lottery Amendment Act, originally introduced by Councilmember Jack Evans in September, was passed by the DC City Council in December.

It permits retail and digital sports betting in the capital, which has a population of almost 700,000 and teams in each of the major US sports leagues.

While the DC Lottery app would be the only mobile betting platform allowed across almost all of DC, a number of designated facilities, such as the city's major sports arenas, would be able to sign their own partners which would be able to offer their mobile services to customers within a two-block exclusivity zone, inside of which no competition is allowed.

The four stadiums that can apply for Class A licences and offer betting are the 82,000-capacity FedEx Field, the 41,000-capacity Nationals Park, and Capital One Arena and Audi Field which can both hold just over 20,000 fans.

Operators would be charged a 10% tax on gross wagering revenue, with Class A five-year licenses at the sports venues costing $250,000 for those partnered with CBEs. Class B sports betting licences, which do not allow mobile exclusivity, can be obtained by other premises at a cost of $50,000 for those partnered with CBEs and $100,000 for those without. More limited, two-year retail licenses cost $5,000 apiece. Between 40 and 60 other premises that currently offer lottery products – between 10% and 15% of the current total – are expected to apply for licences according to D.C. City Council estimates.

Supplier licences are available for an up-front fee of $10,000 followed by an annual charge of $2,000.

Image: Keith Allison