In Washington, D.C., officials at the Office of Lottery and Gaming began accepting applications for DC sports betting licenses from the district’s four professional sports venues and small businesses on December 3. “All applicants will follow the same licensing process” and the same timelines, officials said. The wagering app itself was set to be operational this fall but was pushed back to January and recently was delayed until first quarter 2020, according to a spokesperson.
However, in reality, applicants who partner with established brands, like FanDuel and DraftKings, are eligible for a Class A temporary provisional license to operate a brick-and-mortar sportsbook at the city’s stadiums and arenas and will receive approval for a provisional license in 30-45 days. As a result, the first sportsbooks would launch during the National Football League playoffs in January 2020 and could accept bets on Super Bowl 54.
On the other hand, DC bars, restaurants, and small business startups must apply for a Class B standard license, which has a 3-6 month approval time. That means those license holders can’t take bets until March at the earliest or as late as May 2020. They potentially could miss out on Super Bowl Sunday and March Madness wagering.
To avoid that, a consortium of 30 bars and restaurants known as Bet D.C. recently was formed to seek a license allowing them to operate mobile sports wagering within their businesses and at on-site kiosks. The group wants to partner with an existing sports betting app, like MGM or DraftKings, which would be separate from Intralot, which was awarded a $215 million no-bid contract to operate the district’s only sports betting app.
Bet D.C. attorney Jeff Ifrah said, “Hopefully, the delay of the District-wide app won’t translate into a further delay for us. We’re very excited to get started. We’ve been waiting for two months for these applications to become available. We trust that the lottery will be fair and transparent in awarding licenses. Hopefully, they’ll approve them quickly. We want to get going right away. We still hope to be live by the Super Bowl and this gives us a shot.”
The DC Lottery initially planned to open up the application process for all potential operators before the NFL season began, but the regulatory framework wasn’t completed by then. October was set as the new start date for accepting applications, but the timeline was delayed again when a local mobile app developer sued the DC Council for granting the no-bid Intralot contract. On October 18, a judge ruled the DC Council did not violate the city’s self-governing law with the no-bid contract. The lawsuit still is pending.
Ifrah added he was disappointed that the district recently added further restrictions on which small businesses can offer sports betting. The district released updated maps of its four exclusivity zones that block at least a half-dozen small businesses from participating in sports betting compared to the original zones released in August. Ifrah said, “We’re extremely disappointed with this development. We were expecting a small business-friendly amendment, not one that makes the situation worse. He represents two restaurants that appealed the original zone boundaries.
Ifrah noted another challenge for bars and restaurants wanting to offer sports betting are the upfront costs, including license fees and infrastructure. Ifrah said that’s why Bet D.C. wants to partner with a third-party app provider, who also could provide geolocation services. “We’d like to go with a brand that consumers know who can handle the geolocation issues. It is the most expensive cost of this whole operation. It’s a problem. A big problem. We’re talking about a couple-hundred-thousand-dollars-a-year problem,” he said.
Also, Ifrah noted, bars and restaurants will be required to post reserve money to ensure player winnings can be covered without jeopardizing the businesses. “The lottery, rightfully, wants to make sure D.C. consumers aren’t put out if they win,” he said.
Another issue is that traditional cash cages, like those in casinos, are impractical and pose safety concerns for businesses. “We don’t want people leaving their table. We want them at the bar. We don’t want them going anywhere. We want them to have their phone, be able to look at it, be able to continue engaging,” Ifrah said.
