Washington D.C. Votes to Legalize Sports Betting

The Washington D.C. Council voted Tuesday to legalize sports gambling in the district, by passing the "Sports Wagering Lottery Amendment Act of 2018" with an 11-2 vote.

The bill will go to the mayor, where it is expected to be signed, and also requires Congressional approval.

The measure stipulates that the D.C. Lottery will run sports gambling for the district, controlling the mobile app through which most bets will be placed.

Washington D.C. joins eight states where gambling has been legalized. Those states include Nevada, Delaware, New Jersey, Mississippi, Rhode Island, Pennsylvania, New Mexico and West Virginia.

The bill provides that Washington D.C. would take a 10 percent tax on the earnings of betting operators after it pays out the winners. Jeffrey DeWitt, chief financial officer for the district, has projected that this will net the city about $92 million over the next four years. That money will be split between programs for crime prevention and child care.

The council added an amendment on Tuesday before the vote that would provide for D.C. to consider whether licensees had to use official data or not.

The official data business has become significant for leagues, which are encouraging states to write that official data must be used by all operators. So far, no state requires that.

American Gaming Association spokesperson Sara Slane issued a statement, saying the gaming lobby was happy that the current bill does not include data fees or integrity fees, which would give the leagues a cut of every bet that was bet on one of its games.

Slane says both have been "rightfully rejected in every other jurisdiction that has enacted sports betting legislation."

The bill provides that gambling operations can exist at both Nationals Park, where the Washington Nationals play, and at Capital One Arena, where the Washington Wizards and Washington Capitals play. Wizards and Capitals owner Ted Leonsis has been a big proponent of sports gambling.

“We are pleased that the City Council is moving quickly to legalize sports gaming in D.C., but we are disappointed that this bill creates a monopoly run by the D.C. Lottery rather than a competitive marketplace for mobile betting," Leonsis told The Action Network in a statement. "This is a disservice to fans, who don’t get the benefit of competition in the marketplace, and a disservice to the city, which will lose out on potential investment and job growth. We strongly encourage the Council to reconsider creating a robust, competitive marketplace for mobile betting in D.C.”

Leonsis' venture capital firm Revolution Growth invested in both DraftKings and sports data company Sportradar, which entered into a six-year, $250 million data deal with the NBA in 2016.

In March, Leonsis told me that he had dreams of turning Capital One Arena into a sportsbook.

Leonsis clarified to Reuters last month that his companies won't attempt to apply for an actual operators license.

"I don’t ever, ever want somebody coming up to me and saying, 'You rested this player for the playoffs and the coach pulled the starters and you didn’t cover the line,'" he told Reuters.

“That’s why you don’t want to touch the money,” he said. “But I could see us partnering with a DraftKings, or an MGM, with a FanDuel. They’ll have the book, they’ll stand behind the money, and we would activate it and promote it.”