The D.C. City Council approved the launch of sports betting in the District. The emergency measure (Sports Wagering Procurement Practices Reform Exemption Act of 2019) passed by an 8-4 margin on its second reading on February 19. It has been previously been approved by a narrow 7-6 margin on its first reading.
This permits the DC Lottery to award a sole-source contract to its current systems vendor, INTRALOT, Inc., to operate the sports betting platform.
According to DC Lottery Executive Director Beth Bresnahan, “ . . . it will go to the Mayor for approval and then transmitted to Congress for review.”
If the launch of sports betting had been delayed to accommodate an open procurement process, there would be a significant loss in revenue by postponing launch until 2022, according to Spectrum Gaming Group. The consulting group was retained to provide an independent analysis/business case of the economic impact of regulating and operating sports betting through the DC ottery. This study—“Analysis and Business Case of the Economic Impact of Regulating and Operating Sports Betting through the DC Lottery”—was released to the Office of the Financial Officer on December 27.
If the DC Lottery were to fast track the launch of sports betting in 2019, over the 10-year analysis period, the net economic impacts would create or support on average: 281 jobs, $51.0 million of output (i.e., business revenues) and $28.3 million of value added (i.e., net new economic activity) and $3.4 million of personal income, according to the Spectrum study. In comparison, if the launch was delayed to 2022, the economic impact shrinks to $26.9 million of business revenues.
According to Spectrum, the DC Lottery will assume two roles—regulator and operator—in the District’s sports betting program: “This is an ambitious plan that is uncharted and unprecedented in the United States, as it seeks to become the first lottery to offer single-game sports betting directly through its network of retailers—a model that is commonplace in European sports betting markets.”
The DC Lottery will sell tickets through its network of brick and mortar retailers as well as act as operator of sports betting through a District-wide digital platform, according to Bresnahan. The tax rate is 10% of GGR for the operator system. There is no integrity fee.
La Fleur’s Magazine interviewed Bresnahan for its January/February 2019 edition. The goal is a fall 2019 launch: ”We are currently working to develop the necessary regulatory and operational framework to responsibly and effectively implement sports wagering in the District,” Bresnahan said. “The goal is to complete regulations and accept applications in July, with the intent of issuing licenses by September of this year. However, to fully implement both our regulatory and operational responsibilities as the bill designates, the Lottery must first acquire the technology, equipment and platforms necessary to launch sports wagering on mobile devices and at retailer locations. We are hopeful that the licensing of private operators and lottery-operated retailers, along with the launch of the mobile app can run on near-parallel tracks.”