The audit compared D.C. with five states — Colorado, Illinois, Montana, New Hampshire and Rhode Island — that offer online legal sports betting. It found that the District took in the least money in wagers. New Hampshire, with a population almost twice as large as the District’s, took in more than 10 times as much in bets.
The District kept a higher margin of the bets it did receive as revenue than any of the five states, keeping 17 percent, while the other jurisdictions kept 6 to 12 percent. The auditor’s office suggested that the District keeps too much money on each bet rather than paying out better odds to winners, a complaint shared by many gamblers who have tried the GambetDC app. Lower “margins may incentivize more bets, resulting in more revenue,” the audit said.
The city’s Office of Lottery and Gaming has said that it is considering raising payouts, a measure it mentioned in its response to the audit.
In addition to raising payouts for bettors, the audit also said the GambetDC app needs technical improvements to make bettors want to use it. The lottery office responded by listing changes it has made and those it intends to make, as well as explaining why some problems for users — such as banks that won’t accept deposits from betting, and federal restrictions on betting in certain neighborhoods of the capital city — are hard to surmount.
The writers called into question D.C. officials’ claim that the launch of the app during the pandemic, at a time when many sports were canceled, has muted revenue. Illinois and Colorado opened sports betting around the same time, the audit notes, yet their revenue picked up as soon as NFL games resumed in the fall of 2020, while D.C.'s revenue stayed low.
“Sports wagering in the District has the potential to generate revenue similar to that received by other states,” the auditors wrote. “Overall, the future success of GambetDC will be tied not just to the strength of the District’s recovery from the pandemic but also to the steps the OLG takes to increase sports wagering revenue.”
The District pays 42.5 percent of gross gaming revenue to the contractor that runs the system, Intralot — which the audit noted is a larger percentage of revenue than Montana pays to the same company to run its state gambling platform, but smaller than what New Hampshire or Rhode Island pay to the contractors running their betting platforms.
Additionally, the audit said that the District paid Intralot another $1.5 million from May 2020 to March 2021 for expenses including marketing and bonuses to attract gamblers. It suggested renegotiating some terms of the contract with Intralot so that the District will be responsible for a smaller share of those costs, noting that Montana and New Hampshire don’t pay any such expenses.
The company’s CEO has blamed the low revenue on the city’s decision to set payouts for bettors lower than the winnings they might expect from private sportsbooks.
The District also collects tax revenue from private sportsbook operators who run their own in-person and online gambling platforms, including BetMGM near Nationals Park and William Hill at Capital One Arena. The audit suggested raising the tax on these private sportsbook operators, noting that D.C. collects 10 percent of their revenue while Illinois collects 15 percent.