The D.C. Lottery on Friday posted its proposed sports betting regulations and if there is any news, it is this: Betting on D.C. college teams or events, in the District or out, would be prohibited. Whether or not college sports could be bet on was not addressed in the law.
“We’re opposed to that because it flies in the face of everything we are trying to promote, which is transparency,” American Gaming Association Senior Vice President for Public Affairs Sara Slane told Sports Handle. “By not legalizing wagering on D.C.’s collegiate teams, it’s just fueling the illegal market.”
The language around the ban on local college teams is a bit confusing, but David Umansky, public affairs officer for the Office of the Chief Financial Officer in D.C., confirmed the ban is limited to D.C. college teams. The text of the proposed regulations goes into great detail to explain that “other games of a collegiate sports or athletic tournament” involving a D.C. team are legal to bet on or that “any game of a collegiate tournament occurring outside the District of Columbia even though some of the individual games or events are held in the District of Columbia” is legal to bet on.
Ban on local college teams not unusual
Stan is right that a ban on betting on college sports doesn't make sense practically or economically https://t.co/cpt2WK1gWL
— tom mills (@thomasemills) February 26, 2019
Though industry watchers are generally against any kinds of carveouts, in terms of what can be bet on and what can’t, the move isn’t unusual. New Jersey doesn’t allow betting on their local college teams and when Illinois legalized earlier this month, it, too, banned betting on Illinois college teams. On the flip side, both Pennsylvania and Mississippi allow for betting on any college sports team or event.
“College and offshore bookies continue to win in wagering on college athletics, because while those are being taken off the board by legitimate operators, they are still allowed to operate in the dark,” said Brendan Bussmann of Global Market Advisors.
Fees, tax rate laid out
Other than that ban, there were few surprises in the proposed rules. Mirroring the law, the regulations allow for sports betting at four professional sports venues in D.C., call for a five-year $500,000 application fee for stadium-based sportsbooks and a five-year $100,000 application fee for restaurants, bars, and other venues, appear to allow two mobile skins per license, and set the tax rate at 10% of gross gaming revenue.
So-called “management service providers,” which likely means operators such as DraftKings, FanDuel, MGM, or William Hill, as examples, will be charged a $10,000 annual application fee.
Oddly not comprehensively addressed are regulations surrounding the lottery, which will have a virtual monopoly on mobile and internet sports betting. While the named sporting venues and other potential licensees can offer mobile apps, those apps will be geofenced to work only within the confines of the venue.
Around D.C. — on the street, in cafes, or in a person’s home — the only mobile that will be available will be the one provided by the D.C. Lottery. That app will be handled by Intralot, the city’s current lottery vendor, and the city is currently considering a five-year, $215 mm contract with Intralot.
The new D.C. Lottery contract has been submitted to the D.C. Council for review and approval. $215 million over 5 years, gives current operator Intralot the right to run normal lottery and sole ability to develop an app-based sports betting platform. https://t.co/exkE7su9mg
— Martin Austermuhle (@maustermuhle) June 11, 2019
Unique to D.C., there is a detailed section in the proposed regulations outlining how Certified Business Enterprises (CBE) should be handled. CBEs were a critical part of the legalization discussion, and according to the regulations, 35% of a sportsbook’s contracts or subcontracts must be with a CBE. Leading up to the legalization, members of the D.C. Council were clear that involving minority- and women-owned businesses based in the District was of paramount importance. But it’s possible that this high threshold could slow the launch of sports betting, at least in some cases.
D.C. has no gaming infrastructure other than its lottery. In a city of fewer than 700,000 people, a fair question is this: Are there enough CBEs with the necessary expertise to meet the 35% requirement?
“It could become a challenge to make sure you have people who can do that along the way,” Bussmann said. “I just don’t know that there are enough people who are qualified to do that.”
The 30-day public comment period on the proposed regulations began Friday, when they were posted. After that period closes, a hearing will be set to entertain comments and, possibly, vote on the regulations. Umansky earlier this year had projected the regulations would be ready for review in early July with a target of launching sports betting in the fall. There is no date set for the hearing.
Photo by Brad Mills / USA Today Sports
