Washington DC presents one of the more peculiar situations in the US sports betting industry. The District of Columbia stands among 15 states and territories in the US that offer online sports betting, but consistently comes in dead last among that list of 15 in terms of monthly mobile sports betting revenue.
In states with both mobile and retail sports wagering, mobile betting produces vastly more handle and revenue than land-based sports betting. Even in Nevada, the most prolific retail sports betting state, mobile apps account for anywhere between 55-65% of monthly betting handle.
By that metric, mobile wagering in DC falls far short of its potential, to put it mildly. Washington DC’s lone retail sportsbook (up until June 2021), operated at Capital One Arena by William Hill, actually generates more handle and revenue than the statewide mobile wagering app run by the DC Lottery.
The lottery-operated app, known as GambetDC, allows players to bet from anywhere within the boundaries of the District. William Hill at Capital One Arena, on the other hand, is limited to in-person wagering and a mobile app that’s only usable within a two-block radius of the arena.
Despite the much farther reach of the GambetDC app, William Hill at Capital One Arena has outpaced GambetDC in terms of betting handle by more than a three-to-one margin in 2021.
Maryland will become one of the next states to launch legal online sports betting. Gaming regulators in Maryland hope for the launch to happen in time for the kickoff of the 2021-22 NFL season.
When Maryland launches, the state will join Washington DC and Virginia as states in the mid-Atlantic region with legal mobile sports betting. Several factors point to Maryland sports betting emerging as a much more successful market than the struggling Washington DC industry.
The Limitations Of The Lottery Sports Betting Model
The DC Lottery currently enjoys a monopoly on the district’s mobile sports betting market. The one-operator business plan is similar to the model used by New Hampshire (and proposed for New York’s yet-to-launch online sports betting market).
The DC Lottery takes an estimated 50% of gross gaming revenue from GambetDC proceeds. The other half goes to Intralot, the third-party operator contracted by the DC Lottery to operate the district’s online sportsbook.
Maryland’s approach to legal online sports betting couldn’t be further apart from Washington DC’s. The state’s sports betting bill (HB 940) allows up to 60 different online sportsbooks to offer mobile wagering.
Instead of a revenue share with a single operator, Maryland will take a 15% tax from all online sports betting revenue. While that 15% is less than 50%, Maryland’s competitive sports betting model will generate much greater revenue than GambetDC, and the state will reap the benefits.
Maryland Vs. Washington DC: Online Sports Betting Revenue Outlook
MarylandSharp.com projects that, at full maturity, online sports betting could produce $217 million in annual revenue. A 15% tax on that revenue would yield a projected $32.55 million in yearly taxes collected by the state.
Gambet DC has produced just over $3.4 million in mobile sports betting revenue so far in 2021. That puts the app on pace to generate $8.165 million in online sports betting revenue by the end of the year.
The DC Lottery doesn’t release the actual revenue share numbers between itself and Intralot. The lottery has states that it keeps 50 percent of online sports betting revenue, which would send just over $4.08 million to the DC Lottery in 2021 if the current pace holds.
If our outlook on Maryland is accurate, the Old Line State will reap eight times that amount in online sports betting tax revenue at full maturity. Washington DC’s online sports betting market has only been around since May 2020, so it might not be fair to compare DC’s current numbers to a full-maturity projection for Maryland.
Can the DC Lottery really expect its slumping mobile sports betting model to pick up steam in the coming years? The district’s lone mobile sports betting app got another competitor in June, with BetMGM setting up a retail sportsbook at Nationals Park.
The nation’s most successful sports betting markets thrive on competition among mobile brands. New Jersey tops the US on that list, as the Garden State is on pace to clear $645 million in online sports betting revenue in 2021.
Entering New Jersey instantly puts more than online sports wagering apps at a bettor’s disposal. Pennsylvania and Illinois also represent surging, competition-driven mobile sports betting states.
Maryland (6.2 million population) and Washington DC (5.378 million population) exits with a largely overlapping fanbase, both with a similar population. Mobile sports betting in the neighboring territories won’t much resemble each other, however.
Barring a significant turnaround for GambetDC, the District might find its residents taking the trip to Maryland for their mobile wagering exploits.