Washington D.C. Keeps Door Open for Expansion of Sports Betting Market

The Washington D.C. City Council has voted against an amendment that would have protected FanDuel as the market’s only online sports betting operator. While the vote doesn’t guarantee that the Office of Lottery and Gaming will open an application process for new betting sites, it keeps the option open.

The move comes just a few months after FanDuel took over as the lone online sports betting operator in the state. It replaced GamebetDC, a failed platform that led to the market far underperforming expectations.

While other industry-leading sportsbooks have inquired about entering the D.C. market, BetMGM and Caesars have led the call for expansion. Both operate retail Washington D.C. sportsbooks in the district and believe a FanDuel monopoly will hurt their bottom line. That was a sentiment echoed during the debate over the amendment.

“But if you support this amendment, it will not allow for that opportunity,” D.C. Councilmember Kenyan McDuffie said. “In fact, any delays are effectively going to continue the sole source monopoly and be to the detriment of existing Class As who have a retail operation at Gallery Place and at [the Washington Nationals stadium].”

While expansion is not a guarantee, the council’s decision to keep the door open is a sign that the debate is far from over.

Caesars and BetMGM are two of the most likely candidates to be added to the online market if it expands. That is largely due to their retail presence in the state, which gave bettors an option other than the maligned GamebetDC app.

Both operators have complained about the decision to replace GamebetDC with FanDuel Sportsbook. Not only does it give one of their top competitors a major edge, but it also changes the market that Caesars and BetMGM paid to join. FanDuel dominates market share in almost every state where they live, and they give D.C. bettors a far better mobile betting option, resulting in fewer trips to retail sportsbooks.

In addition to the change to the market, the monopoly also hands a major victory to a major rival for both operators. FanDuel and DraftKings have a chokehold on the market, and handing them sole control of an underutilized D.C. market makes it even harder for operators like BetMGM and Caesars to compete.

As expected, FanDuel has been staunch in its opposition to any proposed expansion to the online sports betting market. The industry giant has also been vocal in complaining about the timing of the proposal, with FanDuel taking over as the sole operator just months ago.

FanDuel made a significant investment to launch in the district, leading to a massive bump in tax revenue. If more operators are allowed to join the market, they will cut into FanDuel’s revenue generated by their effort to rescue the market. That has led the Flutter-owned platform to complain that the deal to bring them to D.C. was done in bad faith.