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Jonathan ZaunDecember 22, 2018
December 22, 2018

Washington Sports Betting Legalized by Council

Following an 11-2 vote by the Washington D.C. Council on Wednesday, the nation’s capital has moved to legalize and regulate Washington sports betting.

The Sports Wagering Lottery Amendment Act of 2018 – officially known as Bill 22-944 – was introduced in October by D.C. Councilmember Jack Evans (D-Ward 2), shortly after his colleagues on the Council held preliminary hearings to examine potential Washington sports betting legislation.

Evans had previously been forced to amend his own bill – removing a proposed “royalty fee” equal to one-quarter of one percent of sports betting revenue requested by professional leagues – but that concession resulted in overwhelming support for sports betting amongst his fellow Councilmembers.

Washington Sports Betting Bill Slated to be Signed Into Law

In its final form, Bill 22-944 calls for a 10 percent tax of gross revenue levied on land-based retail operators, coupled with a 20 percent revenue tax applied to revenue generated online.

With D.C. becoming the first American jurisdiction without casinos to legalize sports betting, those land-based locations are expected to be housed within the city’s professional sports stadiums and arenas. Additionally, private enterprises including bars, restaurants, and liquor stores will be permitted to offer sports wagering services.

The bill has yet to be signed by Democratic Mayor Muriel Bowser, but she has previously expressed her support for Washington sports betting regulation. Following her expected signing, the bill would then be reviewed by Congress, which is widely expected to sign off given the incoming Democratic majority taking office in January.

Passage of sports betting legislation in D.C. was made possible in May of this year, after the U.S. Supreme Court issued a 6-3 ruling to repeal a federal ban on sportsbooks outside of Nevada. Since that ruling was handed down, seven states – Delaware, New Jersey, Mississippi, West Virginia, New Mexico, Pennsylvania, and Rhode Island – have gone live with legal wagering.

Lottery’s Exclusive Operation Leads to Monopoly Criticism

Due to the lack of casino operators within the District, operation of sports betting in the capital has been assigned exclusively to the D.C. Office of Lottery and Charitable Games.

The lottery program would be permitted to sell sportsbook licenses, renewable every five years, to reputable operators at a cost of $250,000 each.

Based on a launch date of July 1, 2019 forecasted by the Council, lawmakers forecast $6.5 million in licensing and tax revenue over the 2019-2020 fiscal year. Revenue projections are predicted to grow to $8.5 million the following year, and $9.7 million by 2021-2022.

Currently, the D.C. Lottery relies exclusively on Intralot – a vendor based out of Athens, Greece – to provide backend services.

In a press release issued by the American Gaming Association (AGA) – the nation’s most influential gaming industry lobby group – this exclusivity granted to the Lottery was cited as the bill’s primary flaw:

“While the vote today 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.”

The AGA did commend the Council on several fronts, however, with senior vice president of public affairs Sara Slane offering the following praise:

“We’re pleased the bill adheres to a number of AGA’s priorities for successful sports betting legislation, including promoting responsible gaming, instituting a reasonable tax rate and excluding any ‘integrity fees’ or ‘exclusive data fees,’ which have been rightfully rejected in every other jurisdiction that has enacted sports betting legislation.”

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