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Erik Gibbs March 29, 2021 4 min read
Lack of Mandatory Audit Could Weaken D.C.’s Sports Gambling Efforts
Even before it began, the sports gambling market in Washington, DC was mired in controversy. Deals made behind closed doors, shell companies with no physical presence in the region, and lawmakers accepting off-the-books payments were just some of the allegations that were being thrown around when the DC Council was working on its sports gambling regulations. The market still hasn’t evolved the way that everyone had hoped, and it looks like it will continue to be stagnant for a while. The recent revelation that a mandatory audit of the activity is going to be delayed will make it more difficult for sports gambling operators to challenge the DC Lottery’s virtual monopoly of sports gambling.
DC Leaders Continue to Stumble
Local media outlet WTOP reported over the weekend that a mandatory two-year audit of sports gambling activity in DC is not going to be conducted as expected. Auditors – inadvertently or otherwise – somehow managed to forget that they were required to review the state of DC’s sports gambling activity, which means the DC Lottery’s Gambet app will continue to essentially be the only game in town. Other operators hoping to challenge the Lottery’s control through the findings in the audit won’t have access to that ammunition, and it likely won’t be ready for at least ten months.
In 2019, when DC leaders were discussing sports gambling, an amendment was added to the regulations that required an audit after two years. It isn’t due until May 3, but DC Auditor Kathy Patterson has already acknowledged that she dropped the ball. She told WTOP, “Clearly, we missed [the deadline]. We missed the legal requirement, no question about that. That was an error on our part.” This and the fact that two Lottery executives stepped down unexpectedly recently have left doubts over the stability and integrity of the Lottery’s operations.
Gambet Not a Hit With Sports Gamblers
Mobile sports gambling has ruled in every state, with online growth far outpacing that of retail growth. This isn’t the case in DC, however, where Gambet has garnered a lot of support from sports gamblers. The odds offered through the app are typically more expensive than what all other sportsbooks post, an intentional move by local authorities to bring more revenue to DC. It would seem things haven’t worked out as planned.
William Hill is the only other sports gambling operator in DC, but its local sportsbook and app are only found in a two-block radius around Capital One Arena. As a result, Gambet should be doing well. However, according to recent figures, this isn’t the case. William Hill saw a handle of $11.1 million in February, a month-over-month gain of 5.5%, while Gambet received just $4.2 million, a decline of 19.7% from January. Since being introduced, Gambet still hasn’t been able to cover its startup costs.
What’s Next for Sportsbooks
Sports gambling operators had hoped to use the results of the audit to show how poorly the DC Lottery is doing with its sports gambling efforts. While many states around the US only needed a couple of months to introduce sports gambling, DC required well over a year, and it still has not been able to enjoy significant success. Sportsbooks warned this would happen after the DC Lottery and the DC Council teamed up with Greek gaming operator Intralot, and the premonition has come true.
Despite the absence of the audit, there could be more sportsbooks coming to DC, which will further weaken the DC Lottery’s grip. BetMGM is now working on getting a license and FanDuel, which has signed a partnership with DC United, expects to file an application for a license in the near future.