DC Sports Betting Bill Overcomes Initial Hurdles

Washington Redskins

The DC Sports Betting Market Expansion Bill, introduced by Councilmember Kenyan McDuffie, aims to introduce significant changes to the existing sports betting landscape in the District. The proposed legislation would grant seven additional mobile sports betting licenses to the city’s professional sports teams, excluding federal lands. This expansion is seen as a strategic move to enhance the competitiveness and accessibility of the DC sports betting market.

The impetus behind the expansion stems from the professional sports teams’ concerns about the current market structure. They have expressed the need for a more streamlined and expedited process to ensure the longevity and viability of their retail sportsbook operations. The teams argue that the existing framework, which has been in place since the market’s launch in May 2020, has faced various challenges and delays, jeopardizing the long-term sustainability of their betting facilities.

The new sports betting language, if approved, would enable operators to go live within a week of the budget’s approval, provided they meet certain conditions. These requirements include proof of subcontracting with a professional sports team, evidence of licensure and active operations in at least five US jurisdictions, and the payment of a non-refundable $2 million application fee for a five-year license.

The proposed expansion faced an early hurdle when a Councilmember Zachary Parker-led amendment sought to strip the sports betting language from the budget. However, this amendment was ultimately rejected by a 9-4 vote, allowing the expansion bill to remain part of the broader budget discussions.

Councilmember McDuffie, the bill’s primary sponsor, dismissed the notion of “fast-tracking” the process, highlighting the extensive public discourse and hearings that have taken place over the past two years. He emphasized the committee’s efforts to address the concerns raised by the professional sports teams, who have advocated for a more expedited timeline to prevent the closure of their retail sportsbooks.

The budget, including the sports betting expansion language, is expected to undergo further deliberations in the coming weeks. Chairman Phil Mendelson indicated that the finalization of the budget could extend into late June, underscoring the complexity of the decision-making process.

The proposed expansion has faced resistance from the Regional Alliance of Small Business Executives, a political action committee (PAC) that appears to have ties to Intralot, the company that manages the District’s lottery.

Emmanuel Bailey, the CEO of Veteran Services, which owns 51% of DC09 (the limited liability company that manages the District’s lottery), is listed as the chairman of the Regional Alliance of Small Business Executives PAC. Intralot, which owns the remaining 49% of DC09, has been responsible for Bailey’s annual salary as the CEO of the lottery management company, further suggesting the company’s potential involvement in the pushback against the expansion bill.

Councilmember McDuffie expressed frustration with the lack of transparency surrounding the Intralot-Office of Lottery and Gaming relationship, noting that the committee has not been provided with a copy of the subcontract between Intralot and FanDuel, the company that currently operates the District’s sports betting kiosks. This opacity has fueled concerns about the decision-making process and the potential influence of Intralot on the sports betting market’s evolution.

The proposed expansion does not directly affect the existing sports betting kiosks operated by local businesses in the District. Councilmember McDuffie emphasized that the contract with Intralot stipulates that other vendors can operate the kiosks within 15 days if Intralot ceases to support them and terminates the contract.

However, Councilmember McDuffie acknowledged that some small businesses have not had functioning kiosks since April, and they have not been provided with a clear timeline for the replacement of these malfunctioning units. This issue highlights the need for improved communication and support for local businesses that have been integral to the District’s sports betting ecosystem.