Two years of sports betting regulatory turf wars across the United States has produced several species of legal sportsbook apps. There’s some shared DNA, but the quantity and quality of sportsbooks varies wildly among jurisdictions, with their ecosystems created unequally and the logic behind them disparate.
The nation’s capital, currently mired in its own identity crisis, is the site of a legal sports betting model that will provide a fantastic case study in what it means to be a “lottery sportsbook” jurisdiction versus one with “casino sportsbooks.” That’s because the mayor and D.C. Council are due to receive a study in May 2021 evaluating the lottery model’s performance, and officials will have the opportunity to pivot. According to the law, the study is due 24 months after the effective date of May 3, 2019.
Since the May 2018 fall of the federal ban on full-fledged sports betting, state lotteries in Montana, New Hampshire, Oregon, and Rhode Island gained regulatory authority over legal sports betting in their respective states, similarly to Washington, D.C. Generally, that authority grants them the right to decide which sportsbooks enter the market, how many, and according to what rules.
In other states — mainly those home to established casinos –– casino commissions or gaming boards are calling the shots. Lawmakers in New Jersey, Indiana, and Pennsylvania, among others, tabbed those regulatory agencies to craft sports betting rules and regulations, and collect licensing fees. The state also collects a percentage of the licensees’ revenue. In some states, such as New Jersey, the rate varies for online wagering revenue (13%) versus wagers made in person at casinos (8%).
While such states have largely fostered competitive markets allowing multiple commercial operators, most lotteries have favored “lottery sportsbook” frameworks offering residents a single betting source that the lottery itself controls. In other words, a monopoly.
In late May, after a series of delays and disputes and before any marketing campaign, the D.C. Lottery soft-launched its “GamBetDC” sports betting app and web-based platform. According to the D.C. Lottery, 1,000 bettors signed up in the first week at a time when the COVID-19 pandemic rendered the sports calendar very lean through June (and into July). For comparison, during healthier times in December 2019 and with ample advertising, DraftKings, which exclusively operates the New Hampshire Lottery’s sports betting offering, signed up 6,000 bettors in its first 24 hours. New Hampshire’s population is about twice the District’s.
Upon launch, some local and industry media observed GamBetDC‘s site and largely recoiled at its pricing and design. There were also some geolocation hiccups, which the Lottery says it has been addressing.
New bettors in D.C. These odds (prices) are like paying $2 for a gallon of gas, while other states are only charging a $1.
You are unlikely to enjoy sports betting, at least for very long, paying these prices. h/t @TheRealMrACL. pic.twitter.com/KpOOIafRcf
— David Payne Purdum (@DavidPurdum) May 28, 2020
The Lottery defended the new site and defined its view of a lottery-made sportsbook.
“We are a lottery-operated sportsbook. [GamBetDC] is not designed to pay out like a casino-model sportsbook,” Nicole Jordan, director of marketing and communications for the D.C. Lottery, told Sports Handle in June on behalf of the government agency. “Our hold is higher because our mission is to return profit to the District. GamBetDC aims at maximizing revenue for the District while still providing competitive pricing and entertainment value to casual sports bettors.”
Lottery versus casino-run sportsbooks
Objectively, markets that encourage competition among casino-model sportsbooks are flourishing, based on total volume of wagers, sportsbook revenue, and corresponding tax revenue. Lottery sportsbooks can’t say the same, however, though New Hampshire’s looks like an early outlier.
So what exactly does it mean to be a lottery sportsbook jurisdiction, versus a casino-model sportsbook? Sportsbooks are new, unfamiliar animals for lotteries. The same is true for most casinos outside Nevada and their regulatory agencies (although many regional and international casino-hotel operators have Nevada roots and thus sportsbook experience).
While officials from different backgrounds join state lottery divisions, the core lottery business deals in the realm of games with fixed-prize structures and drawings, such as scratch-off tickets and popular jackpot games like Mega Millions, where the percentage that customers win and lose is predetermined. Corresponding revenue is generally projectable.
But in sports and sports betting, results may vary, and veteran oddsmakers know to expect the unexpected. Recall low-scoring Super Bowl LIII, in which the New England Patriots defeated the Los Angeles Rams 13-3. The Rhode Island Lottery-controlled sportsbooks got sacked by Patriots backers (in Patriots country) and took a $2.4 million loss. Out in the desert, taking a much higher volume of bets in a mature market, Nevada sportsbooks combined for a $10.8 million collective win from a 7.4% hold.
For those curious, here's the full breakdown on Nevada betting handle, win/loss, win % and game results for past 10 Super Bowls. pic.twitter.com/jdFVG2QrdU
— Sports Handle (@sports_handle) February 6, 2019
Many state lotteries appear eager at their outset to gain certain, fixed revenue through a type of gambling that — traditionally — has provided operators slim margins, is highly unpredictable, and relies on oddsmaking experience to make a big difference. Many states, like Rhode Island, are discovering that reality may not meet projections — far from it.
Are states empowering lotteries to operate competition-free with a single sportsbook that the lottery itself controls — one that is built to succeed and survive in unfamiliar territory? Or will lottery officials be forced to adapt? The siren call will grow louder from starving state coffers in the wake of COVID-19-fueled budget shortfalls. Ohio and Connecticut remain among the non-legal states, due in large part to clashes among lawmakers and stakeholders over which agency should assume regulatory control — the state lottery or casino/gaming commission.
For the D.C. Lottery, competition is coming soon — from Virginia and potentially Maryland. Nearby West Virginia already allows sports betting. Meanwhile, local bookies, plus dozens of sportsbooks based in the Caribbean, will fight to keep their U.S. customers, who continue to engage with them despite (infrequently enforced) laws against it.
Virginia and West Virginia are actually among the “lottery states,” in which lawmakers tasked (with a nudge or otherwise) lottery agencies with regulatory authority over sports betting. The West Virginia Lottery opted to go the “casino-sportsbook” route, however, permitting each of its five casinos to choose its own sportsbook partner for in-person and online wagering. Sportsbooks are taxed at a rate of 10%.
The Virginia Lottery, in a state with zero retail casinos currently but up to five on the way, is developing its sports betting rules and regulations. The Virginia legislature’s 2020 enabling law requires the licensure of at least four online sportsbooks with the potential for around 15. Residents/customers will be able to access at least three more sites than are available citywide in D.C.
The sportsbooks licensed online in West Virginia, which will almost certainly be vying for the right to dance on Virginia’s web, include DraftKings Sportsbook, FanDuel Sportsbook, and BetMGM, with William Hill on the way.
Tennessee is currently on a similar (but slower-moving ) track as Virginia, but not without signs that its lottery considered going the monopoly route with its existing supplier IGT, plus the complication of a controversial “payout cap” unlike anything that exists elsewhere in the U.S.
New Hampshire’s 2019 law gave its state Lottery the option to license up to five mobile operators and 10 retail books, but after a request-for-proposal process, the Lottery opted for exclusivity with DraftKings, in exchange for 51% of the profit. (Returning to Montana, Oregon, and Delaware for a caveat — along with Nevada, they were the four states to offer some form of sports betting that became “grandfathered” under PASPA and were allowed to continue with then-existing offerings after 1992. As a result, their respective lottery agencies retained authority over sports betting without need for new legislation, and after May 2018 those three states were able to expand their wagering menus.)
The next 10 months in the unique, transient Washington, D.C., terrain will help illuminate what model best serves bettors and the public programs benefiting from legal sports betting tax revenue. It will also show to what degree the models diverge on those fronts. Early returns are plainly obvious, mixed, and controversial.
The D.C. sportsbook product and plan
Pushing through a series of controversies and conflicts, the D.C. Council and DC Lottery bypassed a competitive RFP process, using emergency legislation to finalize its sole-sourcing deal with the Greek company Intralot. There was suspicion that self-dealing drove the decision to grant Intralot a $215 million contract to exclusively manage the city’s only citywide mobile sportsbook.
Furthering the fiasco was a legal challenge to the emergency legislation and the ouster of Jack Evans, the disgraced D.C. Council member who drove the sports betting conversation. The D.C. Council eventually approved the Sports Wagering Lottery Amendment Act in December 2018. The vote narrowly passed over objections of council members David Grosso and Elissa Silverman, who cited Intralot’s recent financial difficulties as another factor for voting against the measure. At the time, the company had seen its credit rating downgraded by three major agencies.
Mayor Muriel Bowser signed the bill, and then it went to Congress for a 60-day review period before becoming law and taking effect on May 3, 2019. The law empowered the D.C. Lottery to oversee legal sports betting in the District, with options ranging from operating its own book with near-monopoly status, to a marketplace open to multiple commercial online sportsbook licensees that would pay the District a 20% tax on gross gaming revenue. The Lottery opted for the former.
Asked in early June about the main appeal of the GamBetDC app, Jordan explained: “For us, it’s convenience. You’ll be able to use it on the website and on a phone. It will be the only mobile app you can use throughout the city.”
The D.C. Lottery also opted to allow some additional, albeit limited competition. Capital One Arena — home to the NHL Capitals and NBA Wizards — is poised to become the first pro venue in the U.S. to offer on-site sports betting. There will be a William Hill Sportsbook at the arena, as well as an online app, but only for use by persons on premises and within a two-block exclusion zone. Up to five D.C.-based pro sports arenas will legally be able to offer sports betting. Additionally, the D.C. lottery will permit Class B licensees — taverns and restaurants — to operate similarly with in-person betting and apps, but only on premises, to be enforced through geolocation technology.
Taken together, it appears that the D.C. Lottery believes the structure and function of a lottery-operated sportsbook is:
(a) To operate largely in the absence competition;
(b) To disregard traditional Las Vegas-style casino sportsbook norms;
(c) To provide entertainment; and
(d) To generate as much revenue for the jurisdiction as possible.
The D.C Lottery did not create GamBetDC by itself. Rather, the sportsbook software and risk-management tools are operated by Intralot, which has had an existing contract with the D.C. Lottery since late 2009 to power its traditional lottery offerings. As referenced earlier, how Intralot gained the opportunity to be the sole provider for an app available citywide is a whole separate and lengthy tale; the 2009 deal was even an 18-month-long controversy.
“In some instances, the [GamBetDC] pricing will be the same, or better than those offered by the others in the industry, but in most cases our odds and pricing will be higher,” Jordan said on behalf of the D.C. Lottery. “We’re not looking for a heavy bettor or a professional odds shopper, who doesn’t take into consideration the state or the District. I won’t pretend that most of the time there won’t be a difference in our odds.”
Intralot is also the sole-source sports betting provider in Montana on behalf of the Montana Lottery. In Big Sky Country, only in-person betting is permitted at terminals inside licensed bars or taverns. It’s too early to tell whether the system has been profitable for the state lottery, but from a product standpoint, the pricing in early March was egregious.
Hey Montana , is this for real ?
Clueless , embarrassing, disgraceful, disgusting , a sham and a scam . pic.twitter.com/JjUAmgF8ea— richie b. (@steviethepencil) March 12, 2020
The resulting platform is GamBetDC, which resembles Montana’s, and has probably validated concerns from a collection of onlookers — including the council members who voted against awarding a sole-source contract, some of whom preferred to invite competition. D.C. Council member Silverman, who was vocal in her opposition to a sole-source contract, declined to comment for this story.
For now, the D.C. Lottery, as prescribed and permitted by the Council, is committed to the mobile monopoly.
“I’m flabbergasted [the Lottery] is taking such a narrow view,” said Rufus Peabody, a respected professional sports bettor and consumer-protection advocate. “It’s not going to be competitive with the surrounding states. It’s not going to be competitive with the offshore books. And to drive revenue to the District, you’re going to need [betting] handle. Basically, they’re saying, ‘We’re going to have a product that is expensive for the consumer, so we’re going to sell fewer of these products.’ At least that’s the way I see it, that they’ll sell fewer bets, if you consider betting as a product.”
Thus, even if fewer customers come aboard for a pricier product, the Lottery appears to be betting that less is more, and that less will still be a lot when it’s the only legal app available all over town.
The sportsbook product and pricing
The logic behind the GamBetDC pricing was largely driven by a report the Lottery commissioned from Spectrum Gaming Group, which formally recommended a pricier sportsbook product (emphasis added):
To mitigate this reduction in GGR, and given the impact of the anticipated retailer commission, it is our recommendation that the DC Lottery begin with a target range of 80% to 85% payout. This should allow the DC Lottery to offer sufficiently attractive odds to new sports betting customers from launch, as well as through the period immediately following, during which it would have at least one year without significant competition from other markets. Notably, the inverse of the payout percentage (i.e., the hold percentage) is the “price” of sports betting.
The average hold percentage nationwide since PASPA was repealed — based on a collective $22 billion in wagers — is approximately 7.5%, according to our calculations based on all reported figures. As indicated by Spectrum’s guidance and the Lottery’s acknowledgement about its elevated pricing, the targeted hold percentage via GamBetDC is 15-20%. That is on the order of two to three times greater than the national average.
Of course, price is not the only factor in a patron’s decision-making. Sportsbooks also attract and repel customers depending on app stability, overall user experience, available betting options, ease and methods of making deposits and withdrawals, promotions, and customer service.
So far, GamBetDC has graded about a ‘B’ in some of these areas and lower in others.
“I’m not sure that software’s ready for prime time,” ‘Captain Jack,’ a pro sports bettor, industry observer, and educator, said in June. “There are pages you navigate to and you don’t even know what you’re betting on, and it can lead to some erroneous bets. The software itself is very clunky. It sort of reminds me of about a five-to-seven-year-old technology in terms of online experience.”
“I initially had problems finding where to sign up, but that might have been more my fault,” one D.C.-based bettor, requesting anonymity, told Sports Handle. “It’s easy to get to the sport you want, but every golf market for example — top nationality, top 5 or 10, outright odds — are all on the same page, making it a little annoying to find a specific golfer. It’s even more of a hassle to find a specific golfer and market on the phone — a lot of scrolling. This is also true for NFL futures on the site. Obviously, the pricing for most games is terrible, but golf futures are comparable to other sportsbooks. In fact they had better prices on several golfers that I bet.
“The site really just feels cheap. They have a lot of golf markets, which I was impressed by, but they don’t have in-game betting for golf like other sportsbooks. Their golf product would be on par with other sites if they had in-game betting.”
But if you want to bet legally on sports, on a mobile device anywhere in D.C., it will be take it or leave it, unless you’re at a Capitals or Wizards game or inside a licensed bar or restaurant. As of early July, though, the physical or mobile sportsbooks connected to Capital One Arena or through any of the Class B operators are not yet licensed.
“If the Lottery’s goal is truly to make the most profit, then you want to put out the worst product that the market will bear, so the market is going to pay -118 on either side,” said Captain Jack. “If your goal is to make a profit at any cost, then that’s one way to do it. It’s easy to do when it’s a noncompetitive market, right?
“It does invite scrutiny, of course, if it winds up similar to the situation in Oregon where the lottery runs the only game in town, and yet they still have not produced any revenue for the state,” he continued. “So it’ll be interesting to see if they try to compete with the bars and taverns and the sportsbooks that will open, and of course, Ted Leonsis and William Hill’s efforts at the Capital One Arena. Or maybe they will just view that as, ‘If you go there, you can use that. We’re here for whoever else is in town, everywhere else in town.’”
Monumental Sports and Entertainment, the entity that owns and operates Capital One Arena, declined to comment for this story. William Hill did not respond to repeated requests for comment.
Although shut out from offering their sportsbooks online citywide, the arena and Class B licensees will at least have the benefit of the reverse in their own quarters. GamBetDC won’t be available inside of the Class B-licensed bars and restaurants that plan to offer sports betting, nor will it be available within the confines of major sports venues, if those venues are offering their own on-site mobile options. Eventually, they will, but only after delay due to the widespread impact of COVID-19.
Plans by the NBA and NHL to complete their 2019-20 seasons and start the next remain a work in progress. Current conditions suggest that Capital One Arena may be able, at best, to host a substantially reduced number of fans later this year.
“William Hill’s plans were to pack people into a 20,000-square-foot sportsbook, whether there’s a game going on in the arena, or whether people are just there to enjoy the town’s biggest sports bar,” Captain Jack said. “Anything that involves a plan to pack people in is obviously now greatly hindered. However, when they saw GambetDC, they were probably pretty happy about it, because the William Hill product, as derided as it may be by some people, is still the most consistent retail sports betting experience in the U.S.”
The man behind the forthcoming sports bar named “Handle 19” in the Adams Morgan neighborhood of Washington, D.C., Shane August, was not surprised but not displeased when the Lottery unveiled GamBetDC. Said August, whose establishment is in the process of obtaining a Class B sportsbook license:
“Intralot went to market with this kind of thing in Montana. Outside of that, it gave us confidence in what we’re trying to do. Obviously our odds will be more Americanized, running -110,” August said. “We understand that theirs is a lottery product, that they may not be trying to capture a wide-ranging audience. But we are. We’re going after the American sports wagering fan.”
August underscored that the Lottery has been supportive in getting Handle 19 up and running.
“The D.C. Lottery has been extremely helpful guiding us throughout the licensure process,” he said. “We need to offer a good product, but also have to educate on what a good line is and what a bad line is.”
Competition on a unique terrain
During the push to legalize at the end of 2018, when only five states had introduced some form of expanded legal sports betting, the D.C. Council had hoped to get a substantial, one-year-plus head start on the competition coming soon from Virginia and probably Maryland. Long story short, that didn’t happen: GamBetDC launched in late May 2020 in a nearly sports-free environment, while Virginia is poised to have operators go live in January or February of 2021. Maryland voters could legalize sports betting in November.
The demographic composition of the betting public that comes and goes or lives in D.C. is also a unique cocktail for this U.S. metro experiment. While roughly 800,000 people work in Washington, D.C., only about 30% of them actually live in the city proper, according to a 2016 analysis by D.C.’s Office of Revenue Analysis. Hundreds of thousands commute in from Northern Virginia and the Maryland suburbs.
When compared to all 50 states, the District has the highest percentage of residents with a bachelor’s degree (56.6%), and nearly one-third of the 700,000 residents have an advanced degree — more than 15 percentage points higher than Massachusetts in second.
“D.C. is a very educated city and I would expect that consumers are going to be a little bit more sensitive to price, and a little bit better informed,” Peabody said. “Vocationally, and in terms of income, it’s a very diverse city, but studies have shown that the average sports bettor tends to be a little more affluent than the average casino gambler or lottery player. So it would stand to reason that the average sports bettor in D.C. would be a little bit more discerning.”
Said Jordan: “We’re a transient area with people coming in and out of the city. Hopefully, in the same way they participate in the [traditional] lottery, they do with sports betting. When they’re in Virginia they can use a Virginia sportsbook, and when they’re in the District it’ll be in D.C. That’s their preference.”
Although there is still much for the Virginia Lottery to decide about its market, the law requires it to license at least four mobile sportsbooks, and likely up to 14. Those include ones that may be offered by the first casinos in Virginia, which the new law set in motion, and two pro teams. At this point, it looks like the field of legal Virginia sportsbooks will include many of the national sportsbook players — FanDuel, DraftKings, William Hill, Rush Street Interactive’s BetRivers, BetMGM, Caesars, PointsBet, perhaps bet365. However long the list, it will present the competition that the D.C. Lottery apparently didn’t want for GamBetDC, but may invite — and tax — come 2021, depending how things shake out.
In Maryland, voters will get a chance to decide in this year’s general election if sports betting should be legal, but that’s about all they will determine. During a legislative session shortened by the COVID-19 crisis, bill sponsors in that state stripped their sports betting proposal of nearly all framework. The November referendum will read:
Do you favor the expansion of commercial gaming in the State of Maryland to authorize sports and event betting for the primary purpose of raising revenue for education?
The bill allows for the Maryland Lottery and Gaming Control Agency to be the regulator (yes, a combination agency in MLGCA), sends any sports betting revenue to public education, and calls for a study. Lawmakers plan to revisit the particulars during the 2021 session should voters approve the referendum.
“I think the question is, how much better are the offerings going to be in Maryland and Virginia?” Peabody said. “And there’s also a lot that matters to consumers besides price. Ease of depositing money, withdrawing money, user experience, that kind of thing. But personally, for me, I know that what I said in the legal jurisdiction, there are huge, vast differences in the experience of getting money or the ease of depositing money, which is a huge factor for me, being able to … with the amount I’m trying to bet, I want to be able to deposit more than a thousand dollars a day.”
There’s another wrinkle — the D.C. Lottery will be permitting lottery retailers such as convenience stores to participate in GamBetDC as well by issuing physical tickets at their retail locations. However, the pandemic has set back the process of outfitting retailers with equipment, and it may take into 2021 for these systems to go live. When they do, no doubt the retailers will write tickets and help boost revenue.
Actually, there’s a second wrinkle. Notwithstanding unusual circumstances for collegiate and professional sports in the fall and winter of 2020, the overwhelming majority of college and pro football games are played on weekends — when the overwhelming majority of workers residing in nearby states will have already exited D.C. for homes outside city limits. Bookmakers know that most wagers, particularly from recreational types, are placed in the hours before kickoff. Betting volume is generally higher on weekends across all sports.
In addition, scores of businesses and federal agencies, in light of public-health events, have been forced to adapt to environments where at least some staff now work from home. Many businesses are discovering that employees are equally, if not more productive when working in pajamas, without having to battle through a commute. Also, there’s less overhead. The amount is yet unknown, but a percentage of these people will be spending less time, possibly a lot less time, in D.C. offices.
Even before the pandemic, Spectrum Gaming, which encouraged a mobile betting monopoly in D.C., factored some of this metro shedding into its revenue projections. The group wrote:
Spectrum further assumed Virginia would offer sports betting in 2020 and Maryland in 2024. The study assumes 25% of Virginia and Maryland commuters would cease betting in DC each year after each of their respective states began offering sports betting.
***
Spectrum’s analysis also assumed that, once a Virginia or Maryland player was lost, the player would never wager again with the DC Lottery or the DC independent operators. This dollar-for-dollar cannibalization assumes a worst-case scenario in which the commuter is lost in total.”
And this is a portion of Spectrum’s 2018 report, which impacted the Lottery’s projections:
Based on this projection, SG2 estimated that the GGR in 2019 would reach $23 million. The study ultimately projected that DC sports betting GGR would reach $84 million by 2023 by assuming a 10-year compound annual growth rate (“CAGR”) of 20%, in line with the growth rates noted elsewhere for sports betting in other jurisdictions.
A perusal at figures achieved in other jurisdictions indicates that the District is unlikely to realize these numbers. Certainly not the 2019 dollars — as there was no live app.
The future and the potential game-changer
D.C. indeed beat nearby Virginia and Maryland to the legal sports betting punch, but the kind of race the Lottery is running may leave it grasping for a course change by the end of next year. And as it turns out, the applicable law does have a built-in mechanism to effectuate such a change.
This is Section 311 (a)(2) of the Sports Wagering Lottery Amendment Act of 2018 (emphasis added):
The Office may offer a mobile or on-line sports wagering product, either by taxing mobile and on-line licensed retailers at a rate of 20%, without limit to the number of licenses issued, or through contract with a limited number of partners operating an Office of Lottery and Gaming mobile and web-based sports wagering operation, whichever can be shown to return the most revenue to the District.
Conceptually, the D.C. Council’s idea was to launch a lottery run product with no competition and have the ability to “pivot,” if the returns fail to meet expectations after a year. Come May 2021, the District and officials will examine performance and popularity versus projections, and the impact of competition. Here’s 311(f)(3) from the Act:
Twenty-four months after the effective date of this title, the Office of the District of Columbia Auditor shall prepare a study evaluating the performance of the sports wagering instituted by this title to determine the level of District revenue generated by mobile and online gaming compared to other similarly situated jurisdictions and submit the completed study to the Mayor and Council.
Of course, there’s room for interpretation in that clause, determinations are flexible, and studies may say whatever someone wants them to say.
“It will depend on what they use for comparison,” Captain Jack explained. “Logistically, Delaware is probably the best comparison for them. But Delaware hasn’t shown anything great, and they don’t have a mobile product. Oregon has yet to turn a profit. Rhode Island was struggling to turn a profit for the longest time. So looking ahead as to what they’re going to be able to do, it doesn’t really look good.
“However, when compared to some of these other jurisdictions that have struggled, D.C. might figure ‘Well, we’re holding 9%, more than some of these jurisdictions, so full steam ahead.’ I don’t think they’re going to compare it against what their initial expectations were, and studies like the one contemplated in the Act, they’re sometimes just politically weighted anyway, so it’s not like they’re going to prove or disprove anything.”
New Hampshire, for now, is in two ways the outlier among Lottery jurisdictions. Although operations were live only briefly during normal sports times — the launch came in December 2019 — the sportsbook produced $4.6 million in revenue through May 2020, about half of which goes to the state. Not bad. But although New Hampshire went the monopoly route and awarded a sole-source contract, it went to DraftKings, which appears to be offering the same “casino-sportsbook” product it has in other jurisdictions in which it is commanding a huge market share.
“DraftKings is offering the same prices in New Hampshire as they are in New Jersey, and I’m encouraged by that,” Peabody said. “Maybe down the line, they’ll decide that they can use their monopoly power, but I’m glad right now that they’re offering the same product in a state where they do have a little bit more pricing power.”
DraftKings is very likely to find a foothold in Virginia and join a roster of nearby competitors for the usually high-priced GamBetDC.
“Do I think it’s possible D.C. is going to maximize revenue with that model? I think under one particular circumstance, yes,” Peabody said. “But you would need consumers. You need bettors to be price-inelastic. Demand would need to be inelastic. But I don’t really see that. I think that bettors in America are more educated, generally, than in Europe.”
For D.C., the calendar is circled for May 3, 2021, when the Lottery must reckon with the performance of its model of choice. It will be a moment to decide on staying the course with GamBetDC or to make a potential pivot, but either way, it’s a moment of truth.
