D.C. City Councilmembers approved the first reading of a sports legalization bill, putting legal wagering one major step closer to fruition. The full Council approved the bill at its meeting Tuesday night, clearing a pivotal hurdle.
A second reading, and likely approval, should come as soon as the Council’s next meeting Dec. 18. WTOP reports final alterations on remaining details will need to be settled by then, but it appears the Council will go ahead with legalization.
Any passed bill needs approval from the mayor’s office. Mayor Muriel Bowser is a supporter and will almost assuredly sign the legislation.
All D.C. Council ordinances are subject to final approval from Congress, but it appears highly unlikely it will deny this bill.
The comparatively quick turnaround positions D.C. to be the ninth jurisdiction with legal betting and possibly the third with online offerings. Assuming no other obstacles, this could happen within the first few months of 2019.
Much of the debate has come over a unique set of access restrictions unlike any other jurisdiction in the country.
D.C. was in an unusual situation to begin with. It has no traditional gaming venues like casinos, slot parlors or horse tracks. An online betting offering was imperative to have betting at all. Councilmembers created a solution that allows online and mobile betting, but adds an odd way to go about it.
The current bill calls for a “hybrid” system that gives exclusive access to the D.C. lottery except for certain exclusion zones. Councilmembers believe that will include facilities like the home ballpark of MLB’s Washington Nationals, and could extend to bars and restaurants.
These facilities would need to negotiate exclusive contracts with private sports betting operators, which would then be able to block the Lottery’s offering and allow only their site for taking bets. These partnerships would likely pale in both size and scope compared to the D.C. Lottery option, which would be the only operator available everywhere else within the District limits.
This sets up a de facto monopoly for the government-run lottery, much to the chagrin of private operators.
City CFO Jeffery DeWitt pitched this system as the most lucrative option. He said the Lottery would garner about 20 percent of money wagered, a notion dismissed by industry observers. Sports betting purveyors historically average about five percent revenue on all bets, so the 20 percent figure seems implausible.
To reach these projections the Lottery would need to exclusively offer parlays, which typically have far higher margins, or present non-competitive wagering lines. Either system would drive players back to the black market, which is much of the reason the City’s elected officials supported legal wagering in the first place.
Officials do present a possible lifeline for private companies.
The bill calls for greater access to gaming companies to operate within the District if it proves to be more lucrative than the Lottery-based model. How or when that would go about remains to be seen, but if industry projections hold true, the Lottery model will not match its estimates and city officials would have no choice but to expand access.
Councilmembers moved on from another potentially contentious issue last month. Councilman Jack Evans, the bill’s sponsor, argued for a portion of all revenues to go back sports leagues in exchange for data. This “data fee” was shot down at a committee meeting in November and did not resurface during discussion before the full Council at its meeting earlier this week.
Comparatively more minor discussion about access at D.C.’s sporting venues were finalized at the Dec. 4 meeting. The facilities will have an exclusivity zone of a few blocks that prevent any competing entities from taking bets. This is a boon for the City’s professional sports team owners like Ted Leonsis, who has backed legal betting and envisions sportsbooks within stadiums in D.C. and across the country.
D.C. is one step closer to joining a host of states along or near the eastern seaboard taking bets, which now includes Delaware, New Jersey, West Virginia, Pennsylvania and Rhode Island. Perhaps more significantly, it jumps ahead of bordering Maryland and Virginia in the sports betting expansion race.
Culturally linked to its neighbors on both sides of the Potomac, D.C. will likely take a bet before either bordering jurisdiction. Both states have introduced sports betting laws, undoubtedly an impetus for D.C. rapid moves to pass a bill of its own.
Highlighted by the 2016 opening of MGM National Harbor, intentionally located just across the borders of two jurisdictions without casinos in Virginia and D.C., Maryland’s casino industry has generated billions of dollars in bets. Sports betting legalization is an increasingly likely next step.
MGM National Harbor’s success also drew the attention of Virginia, which sees tens of thousands of its residents cross the river to bet there every year. After centuries of opposition, the commonwealth’s attitude toward gambling has shifted and it could see its first of possibly several casinos sometime in the next few years.
Both Maryland and Virginia will take up sports betting bills in 2019. With D.C. possibly taking bets by the time lawmakers return to their respective state capitals, there is now more pressure than ever to pass legalization bills in two more heavily populated states that may, in turn, propel others to so the same.
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