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The biggest sportsbooks in D.C. could be at Capital One Arena and Nats Park

Fans line up outside Capital One Arena before a Stanley Cup playoff game. (Andre Chung for The Washington Post)

When sports gambling is formally legalized in Washington, fans will have the option to place bets in convenience stores, bars, restaurants or from their living room couches. But the most visible and elaborate betting venues could feel familiar to D.C. sports fans: the high-traffic arenas and stadiums the city’s professional teams call home.

Mayor Muriel E. Bowser (D) is expected to sign legislation that grants four arena and stadium operators the option of creating Las Vegas-style sportsbooks on-site. The exact timeline was cast into further uncertainty this week when the D.C. Council delayed a key vote that would have allowed the DC Lottery to begin negotiating with a preferred vendor. While the first legal sports betting likely won’t take place until summer at the earliest, teams and stadium operators are weighing their options and deciding how they want to forge ahead.

A city-sponsored study estimated that 150 to 200 D.C. businesses might seek licenses to take sports bets, but the bill that was approved last month by the city council grants special privileges to the four stadiums and arenas. If those operators choose to get in the gambling business, no other entity can take sports bets legally within a two-block radius. That means the most prominent brick-and-mortar sports wagering locations in the city could be Capital One Arena in Chinatown, Nationals Park, the newly-constructed Audi Field and the St. Elizabeths East Entertainment and Sports Arena in Congress Heights.

While the city works out details on regulation and licensing, those four stadium operators have to decide whether the potential revenue is worth the investment to create a glitzy sportsbook in and around their facilities. Officials with Monumental Sports, which owns the downtown arena, the Nationals, D.C. United and Events DC, the District’s convention and sports authority, which runs the St. Elizabeths arena, declined to discuss any specific plans before the mayor has signed the legislation into law. The bill’s details rankled some, and team officials have indicated opening a sportsbook on-site isn’t necessarily an easy bet.

“There are still a lot of open questions,” said an official who oversees one sports facility, who requested anonymity because aspects of the District’s implementation remain pending. “We’ll see what comes out with the mayor and the regulations and the whole thing, but it certainly doesn’t seem like it’s a friendly bill to the stadiums and arenas.”

D.C. Council puts off decision on sole-source sports betting contract

The city recently commissioned a study by Spectrum Gaming, which estimated legal betting annually will bring more than $28 million of value added to the city, including 281 jobs, if the District can launch sports betting this year. The study assumed 163 retailers “would have the foot traffic and resources necessary to offer sports betting,” and also estimated “200 food and beverage establishments would choose to offer sports betting.” But those offerings could largely be limited to a kiosk or two relegated to a corner. The arenas and stadiums can plan for something more elaborate.

Perhaps the biggest winner will be Monumental Sports CEO Ted Leonsis, who owns Capital One Arena, in addition to teams such as the Wizards, Capitals and Mystics, and has been an outspoken proponent of legalized sports betting. Because of league restrictions, Monumental would have to partner with an established gaming company to run the sports betting operation and effectively would serve as landlord to a sportsbook. Leonsis’s venture capital firm Revolution Growth has invested in DraftKings, but Monumental has not yet announced any gambling partners to date.

The eventual partner would be able to pay $250,000 for a five-year license that would enable the arena to host a sportsbook.

“It’s an exciting prospect to have a nice sportsbook right in downtown D.C.,” said Randy Boe, Monumental’s general counsel. “We bring about 3 million fans a year to the building, plus it’s a pretty highly trafficked part of town.”

The arena would have betting windows and kiosks inside, but the grander vision is for a casino-style sportsbook — betting, food, drinks, TVs — that’s accessible from both inside and outside the arena. Monumental likely would identify retail space around the building that would be open to fans even when no teams are playing in Capital One Arena.

“I could see someone comes here for lunch, someone gets here at 5 o’clock, they’re watching other games, they’re placing their bets,” Leonsis told The Washington Post in an interview last year.

Similarly, Nationals Park, which hosts at least 81 games each year, is a cornerstone for a newly thriving neighborhood. Nationals attendance has topped 2 million fans each of the past seven seasons.

Audi Field is located barely one-quarter mile away from the baseball stadium — its two-block radius would overlap with the Nats’ — but could have a tougher time attracting the same number of customers, if both D.C. United and the Nationals apply for licenses.

The St. Elizabeths arena, home to the Mystics and Capital City Go-Go, opened last fall in Ward 8, not far across the river from the baseball and soccer stadiums. City officials hope it will prove to be a centerpiece for residential and commercial growth, but it’s not surrounded by as many entertainment and nightlife options as the other sports facilities.

Regardless, the arena and stadium operators know that the bulk of gambling income will come via mobile betting. According to Jeffrey DeWitt, the city’s chief financial officer, legal sports betting could generate $7.69 million in the current fiscal year and nearly $92 million over the next four years. City estimates suggest that two-thirds of sports betting revenue will come through mobile betting.

With sports gambling legal, some are betting on a new kind of fan experience

The city council planned to consider a proposal Tuesday to bypass a competitive bidding process and begin negotiating immediately with Intralot, the company that already provides the platforms, terminals and communications network used by DC Lottery. But the measure was withdrawn at the last minute. It was not immediately clear how that will impact the timeline for sports betting in the District. David Umansky, a spokesman for the chief financial officer, said last week the city’s goal is to launch sports betting this summer, though DC Lottery officials warn it would take three years if the city goes through a bidding process for vendors.

Even after a company is chosen and contracts are signed, regulations need to be drawn up and the licensing and application process sorted out. Some fear the District won’t take its first bet until late 2019 — or later — which gives the local teams, stadiums and arenas plenty of time to consider their options. The stadiums and arenas can host their own online platforms, but those would be accessible and exclusive only within that two-block radius, cutting into the facilities’ revenue potential.

“Our incentive to spend a lot of money on something has been minimized,” one sports facility operator explained.

Without a sprawling mobile option, sports betting might not be as lucrative for stadium and arena operators as some initially hoped, but it still presents an opportunity.

“Think of the college national championship game: If you’re going to watch it and make wagers, you’ll go to one of the larger, better-outfitted sports books with screens everywhere,” Boe said.