That’s far short of the $17 million city officials had projected sports gambling would raise in the fiscal year ending Oct. 1.
Capital One Arena so far has drawn more volume than GambetDC, launching in August and collecting triple the wagers that were placed on the online app over a three-month period. Audi Field, Nationals Park and dozens of restaurants and bars have also expressed interest in launching in-person sports gambling, though the timing is uncertain.
City officials cited several factors for the anemic performance so far of the app, which was forecast to generate the vast majority of the city’s overall gambling revenue. They include the cancellation of many sports competitions because of the coronavirus pandemic; financial institutions declining to process online bets and winnings; and confusion about geographic restrictions for placing wagers.
But industry analysts say the District and its contractor, Intralot, also bear responsibility for GambetDC’s sluggish start because the app offers less-attractive odds than offshore bookies and casinos, dissuading seasoned gamblers from placing bets.
“The app has been underwhelming, to be quite blunt,” said Sara Slane, a D.C.-based gambling industry consultant and former spokeswoman for the American Gaming Association. “What you have to do is have a really competitive . . . model in place that allows operators to compete with offshore.”
Nicole Jordan, a spokeswoman for the D.C. Lottery, which regulates sports betting, said the city expects to see revenue grow as the pandemic recedes. She noted bets surged from about $750,000 in July to $2.1 million in August with the return of fall sports.
But the city also revised gambling revenue projections for the next fiscal year to $12 million, down from the $28 million it projected in 2019, before lawmakers approved a no-bid contract for online betting in hopes of launching the industry before neighboring states.
“The pandemic is having a negative impact on every aspect of life today and, as expected, sports wagering is no exception,” Jordan said in an email. “Game cancellations across leagues, and an abbreviated college football season with at least 75 percent fewer games combined with a dramatic drop in the District’s daytime commuter population will not only impact lottery generated revenue, but also revenue from privately-operated sports books.”
Legal sports gambling came to D.C. after a contentious political fight.
The D.C. Council narrowly agreed in July 2019 to suspend competitive bidding and allow the Greek company Intralot to oversee the city’s monopoly on mobile and online wagers. Investigations by The Washington Post showed that the contract benefits a host of people with connections to city hall and that the primary local partner on the deal had no employees and touted on its website executives who didn’t work there.
Lawmakers defended the arrangement at the time as the best opportunity to get ahead of neighboring Virginia and Maryland and raise money for important city program such as violence prevention and early-childhood care.
But the budget they recently approved forecasts no sports betting revenue for those initiatives over the next several years. Officials note that those forecasts are conservative estimates that will probably change, but they also serve as an acknowledgment that as of now, the city cannot rely on bets to fund these programs.
Although the pandemic has hampered sports betting across the country, some jurisdictions such as New Jersey saw wagers surge to pre-pandemic levels in August, showing there is still a substantial market, analysts say.
For D.C. to meet its revenue goals, analysts say, it must win over the most passionate sports gamblers — and get them to place bets frequently.
“Sports betting is not like a lottery game. In order to churn out revenue, you have to be taking a lot of bets,” said Eric Ramsey of LegalSportsReport.com, a sports betting industry site. “There’s not enough people in D.C. to make that happen at $10 or $20 a bet. . . . You need people with $10,000 who want to put that down.”
City officials say they expect those big betters eventually to go to arena sportsbooks operated by seasoned industry players, such as the British company William Hill’s partnership with Monumental Sports and Entertainment for betting at Capital One Arena.
The arena, normally home to the Washington Wizards and Washington Capitals, started taking wagers at kiosks and ticket counters in the box office in early August as a precursor to a full-fledged sportsbook that may open by the end of the year.
On a recent Tuesday lunch hour, the arena sportsbook — which gives gamblers a higher share of winnings than the city app — saw a steady stream of people coming to place cash bets of up to $500 at kiosk machines and ticket counters. Electronic screens displayed money lines above. Arena officials said the line stretched for blocks ahead of the opening weekend for the National Football League, a sign of potential demand.
“We have to give a customer who may be betting in the black market a reason to break up with his bookie and bet legally,” said Joe Asher, the head of William Hill’s U.S. operations. “It’s not the easiest thing to do because oftentimes people had these relationships with their bookies for many, many years. The best way to do it is a really good product at a fair price.”
Patrick Read, a 42-year-old self-described sports junkie, says he has given up online betting and instead makes daily trips to the arena before taking the train to his gym.
“The problem with online betting is you got to wait some time to get your money, three weeks to a month,” said Read, wearing a Washington football hat and a Nike mask after placing a $20 bet on baseball and football games on Tuesday. “Here, you win and come back the next day and get your money.”
Other gamblers interviewed outside the arena said they didn’t know about the GambetDC app or panned it for offering worse odds and requiring users to submit identification and financial information.
“If you never gambled before and opened up the app, you’d be like, ‘I need a master’s degree for this,’ ” said Nathan Pereyra, a 30-year-old Virginia resident who was happy to place bets at Capital One instead of driving to Delaware casinos. “I’ve done pretty heavy sports gambling in my day, and even I thought there’s too much going on.”
Jordan, of the D.C. Lottery, said GambetDC is not necessarily trying to win people like Pereyra and Read over. “Our aim is to generate additional revenue for the District by attracting smaller wagers from casual bettors seeking a convenient form of entertainment,” she said.
Slane, the gambling industry consultant, questioned that model. “I don’t really understand that theory you are going to attract a person that doesn’t understand betting. I don’t think that’s the goal of any legal regulated market,” she said. “You want customers to come back and have fun.”
While the app has processed more than 100,000 bets, some casual betters seem to also be wary.
GambetDC has a 1.6-star rating on the Apple Store based on user reviews, many of which cite challenges in depositing money, poor customer service and a difficult interface.
Jordan acknowledged customer concerns but said some issues were out of the city’s control.
She said multiple financial institutions have declined to process sports betting transactions, barring many customers from depositing money or cashing out with their debit or credit cards.
Location restrictions on betting have also caused confusion because people cannot use their app on federal property or within a four-block radius of arenas. Although people can use the app on D.C. land even if they don’t live in the city, she said, the warnings about placing bets in prohibited locations have confused some customers.
“The majority of complaints we have received concern these issues, and we are continuously working to make them easily understandable to our customers,” she said.
D.C. Council Chairman Phil Mendelson (D), who championed the no-bid contract for online sports gambling, said it’s premature to declare failure.
“Revenues have fallen short. But have they fallen short because we have a lousy system, or because the system had rolled out differently than we expected?” he said in an interview. “It’s too soon to say, and the criticisms seem primarily from the competitors in the private sector who didn’t want us to have a government role at all.”