Four weeks after local lawmakers voted overwhelmingly to legalize Washington DC sports betting, Mayor Muriel E. Bowser (D) signed the Sports Wagering Lottery Amendment Act.
Officially known as Bill 22-944, the sports betting legislation was authorized by the Council of the District of Columbia via an 11-2 vote held on December 18 of last year.
Mayor Bowser had previously voiced her support for a regulated Washington DC sports betting industry, so her signature had been viewed as a foregone conclusion. Even so, putting pen to paper didn’t complete the process, as is required to conduct a 60-day review of any Council bill which creates a fiscal impact for the city.
That provision ensures two months will pass before legal Washington DC sports betting becomes a reality. But given the lethargic legislative pace set by Congress when matters of national import are concerned, a citywide effort to set up legal sportsbooks shouldn’t draw undue scrutiny.
Even as Congress is widely expected to allow the sports betting legislation, the District’s desire to become the first “Beltway” jurisdiction to establish legal wagering isn’t immune to controversy.
Back in October of last year, Beltway neighbors Virginia and Maryland also introduced sports betting bills to keep pace with D.C. Councilmember Jack Evans (D-Ward 2).
But as Virginia has been forced to wait until its new legislative session began this month, and Maryland requires a voter referendum that can’t be held until 2020 at the earliest, D.C. holds the inside track to achieving regional “first mover” status.
To maintain that edge, D.C. Council Chairman Phil Mendelson (D) introduced an amendment shortly after the bill passed to ensure that the D.C. Office of Lottery and Charitable Games was holding exclusive right to run online / mobile sportsbooks. Actual backend operations of the iGaming side of the industry would fall to the Greece-based gaming firm Intralot, which currently holds an exclusive contract to manage the D.C. Lottery.
In a memo sent to the Council, Mendelson offered a doom and gloom alternative if an independent iGaming procurement process were used instead:
“This emergency legislation is necessary to allow DC Lottery to obtain the technology platforms, lottery gaming systems, and related services to launch sports betting in the District in fiscal year 2019.
Without this emergency legislation, the Office of Chief Financial Officer will have to go through a prolonged procurement process that could delay the implementation of sports wagering in the District by as many as three years, foregoing revenue and eliminating the advantages of being an early adopter of legalized sports wagering.”
The American Gaming Association (AGA) – a D.C.-based organization that serves as the gaming industry’s largest lobby group – issued a statement to signal its concern over a single-operator industry:
“While the vote today [Dec. 18] is progress, we remain deeply concerned about giving the lottery a virtual monopoly in the mobile market.
Predictably, this will result in less investment and innovation, to the detriment of consumers and the ability of a nascent legal marketplace to compete with the accessibility and convenience offered by many established illegal wagering operations.”
Under the legislation as signed by Mayor Muriel, the D.C. Lottery would also provide five-year sportsbook licenses, at a cost of $250,000, to reputable operators.
These “Class A” licensees would then launch land-based bet shops within four designated locations:
These brick and mortar sportsbooks would see their gross gaming revenue taxed at 10 percent annually, while the Intralot online / mobile operation would pay a 20 percent rate.
Assuming the launch date of July 1 established by the Council, local lawmakers have estimated the city will collect $6.5 million in license and tax fees during the 2019-2020 fiscal year.