Time for a change

Washington DC Office of Lottery and Gaming (OLG) has announced that FanDuel will replace GambetDC as the sole districtwide sportsbook platform. The transition, announced on Saturday, will occur at some point in the spring. FanDuel will gradually take over the existing GamBetDC in-store wagering kiosks.

already controls about 50% of the adjacent Virginia and Maryland markets

Intralot, the Greece-based company that looks after the OLG’s lottery and sports betting operations, selected FanDuel as the new subcontractor for the region’s struggling sports betting sector. The operator already controls about 50% of the adjacent Virginia and Maryland markets and has also had a retail sportsbook at DC United’s Audi Field since June 2022.

Restructuring the agreement

Through the new arrangement with FanDuel, Intralot will have to pay a $5m fee to the District in the current fiscal year. The OLG will also no longer have to cover the annual operating expenses of the sportsbook platform, which range between $2m and $4m each year. FanDuel will be in charge of covering all of the marketing, promotions, and payment processing.

Talking about the FanDuel takeover, OLG Executive Director Frank Suarez said that it will “ensure that the District maximizes tax revenue under its existing contracts this year while delivering a best-in-class experience.”

A lot of questions

The original decision to give Intralot a five-year, $215m contract to create the district’s sports betting platform without holding a competitive bidding process was a controversial one. GambetDC has generated just a fraction of the $20m in annual tax revenue that was expected when lawmakers legalized the activity in 2019. Bettors complained about an array of issues, including uncompetitive odds, subpar technology, and bad customer support.

Intralot was told in January to find an established private sportsbook operator to act as a subcontractor. OLG officials believed that this approach would be quicker than starting an entirely new bidding process. They also think that having an open sector would hurt the retail businesses that have seen an increase in business since rolling out wagering kiosks. The OLG’s contract with Intralot expires this summer and it is unclear if officials will want to renew their agreement.