Washington D.C. Discussing Expansion of Mobile Sports Betting Market

Washington D.C. residents may soon have a vastly improved sports betting market.

The D.C. City Council met last week to discuss the possibility of expanding online sports betting in the state. The state currently allows only one online sportsbook to operate, which has led to one of the worst markets in the US.

The nation’s capital recently made a significant change by ditching beleaguered GamebetDC in favor of FanDuel Sportsbook. The move comes after the DC-only operator experienced major issues with their app, leading to a decline in online betting. The change to FanDuel represents a major upgrade for both bettors and the district.

The council's new proposal would allow up to seven online sportsbooks to operate in the state. Online operators would be required to partner with one of the district’s sports franchises and stadiums. That list would include the following:

• Audi Field

• Capital One Arena

• DC United

• Nationals Park

• Washington Capitals

• Washington Wizards

• Washington Nationals

The expanded market is expected to result in a significant uptick in tax revenue for D.C., which has seen a steady decline since legalizing sports betting in Washington, D.C.

New Tax Rates Creating Opposition to Expansion

Along with expanding the number of online operators in the state, the City Council would also increase the tax rate from 10% to 20%. That has led to an uproar from the state's retail sportsbook operators, including Caesars. They would also see their tax rates double despite being open in the district for some time.

“In this case, we’re talking about increasing the license fee and the tax rate, which is [a] double whammy on us,” said Caesar’s VP Dan Shapiro. “It’s all a math equation for us, and you’re changing the dynamic here.”

Given that D.C. is one of the smallest markets in the US, many operators say increased tax rates would make the already high cost of business unjustifiable. Sportsbooks not named DraftKings and FanDuel are struggling to compete in markets across the US, meaning they may not be willing to enter the market if the tax rate rises to 20%.