A group of District of Columbia councilmembers have begun a push to introduce a competitive mobile sports-betting market in the nation’s capital and end the DC Lottery’s near-monopoly on mobile betting in the district.
D.C. councilmember Elissa Silverman introduced the “Sports Wagering and Fair Competition Amendment Act” on Monday (October 24), which would allow for an uncapped number of companies to apply for a new “Class C” license that would permit operators to offer mobile betting throughout the district, except for geoblocked areas surrounding professional sports stadiums, as well as federally-owned land where gambling is prohibited.
Currently, the DC Lottery’s GambetDC app is the only option in much of the district, with the exception of a two-block radius surrounding three sports facilities where private operators who have agreements with the facilities can operate.
Operators would pay a 15 percent tax rate on gross sports wagering revenues, designed to be competitive with neighboring Maryland and Virginia, as well as a $1m application fee for a five-year license, with $500,000 renewals.
The bill would also require the lottery to terminate its contract with Intralot for the district’s lottery system and sports wagering in 2024 instead of picking up a five-year option in the deal and would require new competitive bidding for the lottery system contract.
The DC Lottery would still be permitted to utilize a partner to offer mobile sports wagering, but the bill would require that the product be “reasonably certain to produce net income for the district” after deductions of costs to revenue sharing payments and other related costs.
Silverman has been a frequent critic of the performance of the DC Lottery’s GambetDC sportsbook platform and was a vocal opponent of granting Intralot a sole-source contract to renew its lottery system contract and add sports wagering in 2019.
“We need to turn the page on this embarrassing episode,” Silverman said in a statement.
“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 joined by fellow councilmembers Brooke Pinto, Mary Cheh and Charles Allen in introducing the legislation to the 13-member DC Council.
The performance of the GambetDC app has come under fire from some in the district after failing to meet lofty initial revenue projections.
When the sole-source plan was pitched in 2019 by the district’s then-chief financial officer Jeffrey Dewitt, the program was projected to result in $92m in transfer to the district through September 2022.
Instead, through July 2022, the program had only produced $2.5m in transfers and had a high-profile failure during the Super Bowl where the app was largely unavailable, which later resulted in Intralot paying the district $500,000 in damages.
Lottery officials have argued that the coronavirus pandemic significantly hindered the progress of the GambetDC sportsbook, including the cancellation of sports, as well as far fewer commuters coming into the district from Maryland and Virginia compared with when the projections were made.
However, DC Lottery director Frank Suarez told a panel of legislators, including many who are co-sponsoring the bill, during an oversight hearing in July that the program had overcome a rocky start.
“I want to make sure everyone really has heard that the ship is righting already,” Suarez said. “Everything points to the right direction that the model is working as it should now.
“It may not have been working before like we thought, Gambet may have required more investment or a bigger brand building effort than we anticipated back when we were enacting the law, but now all the numbers show that what we’re doing is the right thing.”