FanDuel Threatens To Terminate DC Lottery Deal If They Lose Monopoly

Written By Mike Breen on June 21, 2024
A businesswoman ripping up a contract

FanDuel’s short stint as the only online sportsbook available throughout Washington D.C. appears to be coming to an end.

When it does, the company signaled it will exit its deal with the DC Office of Lottery and Gaming. The same deal that gave it the citywide monopoly.

Even before the DC Council passed a budget this week that includes a provision opening up the sports betting market to other operators, FanDuel threatened to end its contract in protest.

The company, however, does not plan to stop offering Washington D.C. sports betting. Its operation in the Old Line State, FanDuel MD, is already the top sportsbook in the market.

Provision creates mobile-only licenses

Earlier this month, FanDuel President Christian Genetski sent a letter to the DC Council stating the company was prepared to terminate its deal with the Office of Lottery and Gaming (OLG) if the DC market is expanded to allow other operators to offer citywide online sports betting.

The council’s Fiscal Year 2025 budget does just that.

Under the budget provision, companies operating retail sportsbooks at district sports arenas could operate online sportsbooks throughout the city. New operators could apply for mobile-only sports betting licenses to do the same.

DC Mayor Muriel Bowser and the US Congress must still approve the budget.

FanDuel plans to remain in DC mobile market

FanDuel’s partnership with the OLG went into effect on April 15. The sportsbook replaced the OLG’s previous platform, the unpopular GambetDC Sportsbook. Thus, FanDuel was granted the same monopoly Gambet enjoyed as the only district-wide online sportsbook.

It also became the platform used at retail sports wagering kiosks in DC bars and restaurants.

Under the deal, FanDuel shares 40% of its revenue from online sports wagering with the district. The contract included an up-front $5 million guarantee for the first fiscal year of operations, which only covers April through July 15, when the current agreement ends.

If the budget is enacted, operators with Class A licenses to operate retail sportsbooks and add online services will be taxed 20%. New mobile-only sportsbooks will be taxed at 30%.

Genetski said FanDuel would probably opt for the first route. As a result, there would be a 20% revenue dip for the district from what will almost certainly be one of the top online sportsbooks in the city.

FanDuel has a Class A license at Audi Field, home of MLS team DC United.

Gaming chief warns of less revenue from open market

In his letter, Genetski contended that if FanDuel’s exclusivity were to end, the overall online sports betting revenue share with the district would be significantly less than if the contract was renewed.

OLG Director Frank Suarez previously told the DC Council that, over the next four years, expanding the mobile sports betting market and ending FanDuel’s deal would result in $15.3 million less revenue for DC over the next four years.

Genetski called that estimate “conservative.”

“While FanDuel will be operating in the district under either regime, (mobile sports betting expansion) would lead the district to a significant decline of revenue from sports wagering in comparison to the OLG contract extension.”

FanDuel generated $1.9 million in revenue for DC in just its first 30 days under the OLG deal. It was estimated that FanDuel would generate around $23 million in revenue for DC in its first year.

Genetski cited projections that suggest the expanded online sports wagering market “would generate $8.4 million in Fiscal Year 2025 and $32.2 million over the subsequent four years.”

Future of DC sports betting kiosk program is undetermined

The council meets on June 25 to approve some final technical terms of the FY 2025 budget.

Councilmember Kenyan R. McDuffie crafted the sports betting provision and said he would introduce an amendment to address concerns regarding the sports betting kiosks once the FanDuel contract ends.

Councilmember Zachary Parker said he is worried ending the agreement could hurt the small businesses relying on kiosk revenue.

Genetski said FanDuel’s deal with the OLG had the sportsbook managing the kiosks at a loss.

Photo by Shutterstock
Mike Breen Avatar
Written by
Mike Breen

View all posts by Mike Breen
Privacy Policy