DC Lottery says FanDuel partnership exceeded expectations in 1st month

DC: FanDuel OSB Partnership Exceeding Expectations
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The DC Lottery has reported that its first 30 days with FanDuel as its sports betting partner have “exceeded expectations” by netting $1.9 million in revenue for the District of Columbia.

The lottery said on May 21 that the FanDuel mobile sportsbook app and website generated approximately $30 million in total handle and $5 million in gross gaming revenue from April 15 to May 14. The OLG takes a 40% slice of that GGR, equating to nearly $2 million.

The fact that FanDuel, a perennial market leader in U.S. sports betting, has had a sizeable impact on the district’s performance is not surprising. But the numbers posted by the office illustrate quite how sizeable that impact has been. That $30 million in total handle was a 673% increase on the same period last year and GGR was up even more, at a 887% jump.

The OLG’s $1.9 million revenue slice was an increase of 690% from April 15 to May 14, 2023.

“The transition to FanDuel, the market leader in mobile sports wagering, ensures the long-term viability of mobile sports wagering in the District,” said Frank Suarez, executive director of the DC Lottery. “In addition to a 40% share of GGR and a guarantee of $5 million in revenue in its first year, the FanDuel partnership brings the benefits of a respected brand, commitment to responsible gaming, an established userbase, and a superior sports wagering experience for District residents and visitors.

“FanDuel’s first 30 days have not only met, but exceeded, expectations.”

The office added that by extrapolating from the first 30 days’ results, the district’s per-capita sports betting revenue may rise to over $19. That, it says, would rank D.C. among the highest revenue-generating markets in the country on a per capita basis. From February 2023-24, per-capita spend in D.C. was $2.71.

FanDuel replaces under-performing GambetDC

FanDuel became D.C.’s exclusive provider of regulated sports betting as part of its takeover of GambetDC, which previously held that license. It already had market access via a partnership with the D.C. United soccer team, running a retail sportsbook at the team’s Audi Field stadium.

GambetDC had operated in D.C. as the only regulated sports wagering app since the district launched sports betting in 2020.

However it faced competition from some major players in the retail sports betting market. BetMGM operates a retail sportsbook at Nationals Park and Caesars has a physical presence at Capital One Arena, home of the Capitals and the Wizards. The two sportsbooks hold the right to offer geofenced mobile betting within a two-block radius of those locations.

GambetDC didn’t stand up well to the competition and was criticized by bettors for providing a subpar wagering experience. It fell far short of expectations and lost around $4 million in 2021 alone.

Suarez said before FanDuel launched in D.C. that its entry into the jurisdiction would bring “guaranteed revenue that will be used to fund vital city programs.”

Two weeks ago, the lottery said the switch to the U.S. market share leader was already credited with bringing back more than 22,000 active users to D.C sports betting. The hypothesis was that many of these bettors had turned to other options such as placing bets in neighboring Maryland or Virginia due to a dearth of quality options in the district, and were now flocking back.

FanDuel guaranteed in March that it would raise $45 million in revenue for the city over the course of its five-year deal but projected an even higher number. The sportsbook predicted it would generate up to $119 million for D.C. over that period. In surrounding Maryland, where it holds 50% market share, it yields approximately $265 million in GGR annually.

Other operators want market opened

Other operators want the district market opened up.

A Washington, D.C. Council committee hearing earlier this month discussed a bill that proposes implementing an open, competitive sports wagering marketplace to the district. Representatives from BetMGM, Caesars, DraftKings, and Fanatics Sportsbook all spoke in support of council member Kenyan McDuffie’s would-be Sports Wagering Amendment Act of 2024.

The meeting in early May did not chart a clear path forward, leaving FanDuel as the undisputed mobile sports betting market share leader for now.