FanDuel To Take Over Washington, D.C. Sports Betting

March 12, 2024
Back
The DC Lottery has announced that FanDuel will take over the district’s beleaguered mobile sports-betting application this spring as a subcontractor of lottery vendor Intralot.
Body

The DC Lottery has announced that FanDuel will take over the district’s beleaguered mobile sports-betting application this spring as a subcontractor of lottery vendor Intralot.

The lottery initially announced its plans to transition from its Intralot-powered GambetDC platform to a prominent sports-betting operator in January during an appearance before a DC Council committee, but did not disclose who the operator would be.

In a statement, the Office of Lottery and Gaming (OLG) said that the FanDuel sports-betting application would be available in the district “starting this spring,” but did not set a specific date.

Under the deal, Intralot will make an initial $5m payment to the District of Columbia government before the fiscal year ends in September. That payment alone, the lottery said, will guarantee “a significant revenue increase” from the district’s sports wagering program over the last year.

In fiscal year 2023, the platform only returned $1.3m in transfers to the district’s general fund, less than half the amount it returned the previous year.

Intralot will also assume OLG’s current operating costs for sports betting as part of the deal, and FanDuel kiosks will replace existing GambetDC kiosks in retail locations “on a phased basis.”

“FanDuel’s industry-leading offering will ensure that the District maximizes tax revenue under its existing contracts this year while delivering a best-in-class experience for 18-plus residents,” said Frank Suarez, the lottery’s executive director, in a statement.

The district’s sports wagering program has been mired in controversy since the activity was legalized in 2018. 

The decision to award Intralot a sole-source contract to offer sports wagering in addition to extending its contract as the district’s lottery vendor was a hotly-debated topic across several months of council meetings in 2019, but was backed by the district’s chief financial officer as the best path to launch quickly, ahead of neighboring states Maryland and Virginia, and retain more revenue than under a competitive licensing system.

However, the district-wide mobile platform failed to launch until March 2020 and lottery officials initially blamed the coronavirus pandemic for its slow start, as the district was the only jurisdiction in the United States where retail revenues outpaced mobile revenues. 

By comparison, mobile revenues generated about 95 percent of the total sports wagering revenue in the United States in 2023, according to VIXIO GamblingCompliance research

During a January hearing, however, Suarez said that the platform had flaws beyond the lack of offerings caused by the pandemic, including its higher-hold payout model that led to odds that were uncompetitive with privately-operated retail sportsbooks in the city and mobile operators in neighboring jurisdictions.

“It launched at an 80 percent payout, it launched with a sort of clunky, not as user-friendly app, and that was hard to overcome,” Suarez said. “Even with the changes we’ve made to the interface, I think there’s still player perception that the odds aren’t as good and the app isn’t going to work as well.”

One major potential turning point for the DC Lottery still looms, however, as Intralot’s lottery contract is set to expire in July, and it requires authorization from DC Council to extend the deal. 

Lottery officials said at a council meeting last month that they expected to extend the deal for an undisclosed amount of time.

The deal, which was signed in 2019, can be extended for up to five years, but some DC Council members have been vocal in their displeasure of the underperformance of the sports-betting program in recent years.

Our premium content is available to users of our services.

To view articles, please Log-in to your account, or sign up today for full access:

Opt in to hear about webinars, events, industry and product news

To find out more about Vixio, contact us today
No items found.