In May, the U.S. Supreme Court struck down a federal law outlawing sports betting outside of Nevada. The ruling mobilized lawmakers across the nation who were looking for new sources of revenue and an industry that was looking to expand rapidly.
The District will join seven other jurisdictions outside Nevada that allow sports gambling: New Jersey, Delaware, Rhode Island, Pennsylvania, Mississippi, West Virginia and New Mexico. Arkansas and New York are positioned to join next year.
Lawmakers in Virginia and Maryland have yet to act, while a casino in West Virginia is the closest place for Washingtonians to place a legal wager.
After they approved the measure, lawmakers passed emergency language so that sports betting can begin as soon as Bowser signs the legislation. It requires that anyone betting be 18 or older.
Proponents of legal sports betting say people are already gambling on the outcome of games, so governments should tax and regulate the practice. But critics say promises of revenue are often overblown and warn of social ills, including gambling addiction.
The D.C. Lottery would oversee sports betting under the bill written by council member Jack Evans (D-Ward 2).
“We’re entering into new territory with sports gaming,” Evans said before the vote.
The program is expected to raise $92 million for city coffers over the next four years, according to projections by the Office of the Chief Financial Officer, which also manages the lottery. Most of the money would go to the general fund, but the bill also earmarks about $1 million annually for violence prevention and early-childhood care as well as $200,000 for gambling addiction treatment.
Council member David Grosso (I-At Large), who voted against the measure, said critical programs shouldn’t be funded “on the backs of the poor.”
“The lure of easy, though incredibly improbable, financial advancement preys upon low-income individuals,” said Grosso, who was joined by council member Brianne K. Nadeau (D-Ward 1).
The District has no casinos, but the legislation creates three ways to place a wager: at sports venues such as Capital One Arena and Nationals Park, at private establishments such as restaurants and liquor stores or from anywhere in the city using a mobile application.
The app is expected to be the most popular method to place a bet, but the D.C. Lottery would have the exclusive ability to operate it, closing off a potentially lucrative market to private businesses. Arenas and businesses with sports betting licenses could have apps that can be used only in their facilities.
No state that has legalized sports betting has such an arrangement, industry watchers say.
“Especially from the consumer perspective, it’s better to have more competition and choice, so this is unusual,” said Sara Slane of the American Gaming Association, an industry group. “But it’s obviously better than having the illegal market, so I’m glad they are taking a step in the right direction to provide a legal, regulated alternative.”
The lottery insisted on having no competition for the mobile app to maximize revenue for the city. Lawmakers said they were open to eventually allowing private businesses into the mobile market.
Council member Robert C. White Jr. (D-At Large) unsuccessfully pushed an amendment to allow more competition, giving preference to local and minority-owned companies. He said he wanted to create a homegrown version of FanDuel or DraftKings, the titans of the industry.
“Sports betting is going to be a huge opportunity for the city in terms of revenue, but it’s an equally big opportunity for residents to get jobs and create and expand businesses,” White said. “I don’t think we should be opening up new opportunities and setting aside District funding without including as much minority and women participation as possible.”
The D.C. Council on Tuesday instead approved language shepherded by Kenyan R. McDuffie (D-Ward 5) meant to increase minority participation in other parts of the industry.
After the victory at city hall, the race is on to start a sports betting industry, with sports companies and retailers forging partnerships with gambling businesses.
Under the legislation, private sports betting facilities at arenas must pay $250,000 for five-year licenses. Retailers that want to allow sports betting on their sites must pay $5,000 for two-year licenses.
Tuesday was the last opportunity to pass legislation in the District before an end-of-year deadline. Lawmakers also gave final approval to climate change legislation that aims to move the city toward entirely renewable energy sources, a bill creating a research arm of government focused on education data, and a measure for a pilot program to expand public bathrooms downtown.