Washington DC sports betting
Legal Developments

Washington DC Sports Betting Bill Approved by Council

Washington DC is just a signature and a Congressional stamp of approval away from legal online sports betting. On Tuesday, the Washington DC council voted 11-2 to approve a bill authorizing the lottery to manage a mobile sports betting app throughout the city and to issue licenses to brick-and-mortar retailers.

Tuesday’s vote was the final step the DC council needed to take before passing it on to become law. The bill now moves to the office of DC Mayor Muriel Bowser for her signature. After that, the bill will be submitted to Congress for a 30-day review as required by DC law. If Congress declines to intervene, Washington DC sports betting will become a reality.

According to the Washington Times, Mayor Bowser is expected to sign the bill and Congress is unlikely to shoot it down. If that holds true, Washington DC will become the latest state/district in the US to legalize sports betting since the Supreme Court overturned the federal sports betting ban in May.

Seven states have now legalized sports betting since the ruling. Those states include: Delaware, New Jersey, Pennsylvania, Rhode Island, Mississippi, West Virginia and Arkansas. A tribal casino has also begun accepting sports wagers in New Mexico without new legislation to make it nine states in total that have gained sportsbooks since May, plus Nevada, which has had legal sports betting for decades.

Washington DC will be added to that list now if this bill passes its final two hurdles with no unexpected hitches.

A Look Inside the DC Sports Betting Bill

The Sports Wagering Lottery Amendment Act of 2018 was introduced in September and the DC council moved quickly to push this bill through the process. The bill that was approved today largely resembles the bill as it was originally introduced in September.

The new bill grants the DC Lottery a monopoly over mobile sports betting in DC in addition to establishing two different types of licenses for physical sportsbooks:

  • Class A License: Four Class A licenses may be issued, one to each of four pro sports stadiums: Capital One Arena, Audi Field, Nationals Park and the St. Elizabeth’s East Entertainment & Sports Arena. Class A licenses will be good for five years and will cost $250,000.
  • Class B License: Class B licenses may be issued to other establishments that are not located within two blocks of a Class B license-holder. These licenses will also be good for five years and cost $50,000.

Class A licensees will be permitted to offer mobile betting apps, but patrons will only be able to place wagers while physically present at that location. As soon as fans move outside one of the four stadiums, the DC Lottery sports betting app will be the only mobile option.

The DC sports betting bill has also set a tax rate of 10% on revenue. Tax revenue collected by the state has been earmarked as follows:

  • First $200,000 of tax revenue goes to the Department of Behavioral Health to prevent, treat and research gambling addiction
  • 50% of the remaining revenue will fund the “Birth-to-Three” early childhood program
  • The remainder goes to the Neighborhood Safety and Engagement Fund

Licensed sports betting operators in DC will also be subject to standard regulatory requirements, including:

  • Preventing owners, directors, employees and relatives of licensees from placing wagers with their own sportsbooks
  • Preventing athletes and sporting officials from placing wagers on their own sports
  • Preventing individuals with access to “non-public confidential information” from placing wagers
  • Developing systems to detect suspicious betting patterns that may be indicative of corruption
  • Maintain a sufficient cash reserve to pay winners
  • Maintain details records of sports wagers
  • Prevent minors from placing wagers
  • Establish voluntary self-exclusion programs

The bill also establishes licensing procedures for employees, gaming equipment suppliers and affiliates who participate in revenue-sharing agreements with DC sportsbooks.

Finally, the DC bill denied league requests to include provisions calling for an integrity fee or mandating that sportsbooks must purchase official data from the leagues.

DC Lottery Monopoly for Now

The DC Lottery emerges as the biggest winner today with a total monopoly over mobile sports betting outside the city’s four arenas. While industry stakeholders mostly welcomed the new sports betting bill with praise, they were less enthusiastic about the monopoly.

The American Gaming Association issued a statement on Tuesday commending DC councilmembers for passing a bill with a reasonable tax rate and for rejecting integrity fees and data purchase mandates, but expressed disappointment over the decision to grant the DC Lottery a monopoly over online betting.

In part, that statement reads:

“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.”

Councilmember Jack Evans, who filed the original bill in September, said the law does not necessarily establish the DC Lottery as a permanent monopoly. The portion of the bill which appears to leave the door open to multiple online operators is somewhat vague, but reads as follows:

“The Office may offer a mobile or on-line sports wagering product, either by taxing mobile and on-line licensed retailers at a rate of 20%, without limit to the number of licenses issued, or through a contract with a limited number of partners operating an Office of Lottery and Gaming mobile and web-based sports wagering operation, whichever can be shown to return the most revenue to the District.”

“The bill includes a lot of flexibility,” Evans told the Washington Times on Tuesday. “There will be a Lottery app. If we decide somewhere down the road that we want to have multiple apps, we can do that as well. And it sets up a number of licenses and really gives an opportunity for many people in the District to participate.”

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