Maryland cut the ribbon last week to legal sports betting. Beating Maryland and Virginia, as those who have pioneered the path to legalized sports betting in the area probably know, was one of the main reasons DC rushed its own emergency legalization bill, resulting in an exclusive purchase agreement with Intralot, the Greek company with which DC Lottery already works. With Virginia’s system up and running for about a year, it became clear that GambetDC, the city-run mobile app, was failing to hit the local market. Coupled with the results of a long-delayed review, the gap between a successful state sports betting company and the current state of affairs becomes even clearer.
from Geolocation issues and bad odds, to a User unfriendly interface, GambetDC has missed its chance to conquer the market. But despite its problems, there was still a good reason for DC residents to make GambetDC successful in the marketplace.
On March 10, at a performance oversight hearing, Ridgely Bennett, Chief attorney for the Lottery and Gambling Office, gave a statement (from 10:58 a.m.). This video) that “currently about 50 percent of the gross gaming revenue (GGR) generated by GambetDC or about 2.2 million US dollars net is returned to the district.”
In contrast, private operators, such as the Caesars Sportsbook in the Capital One Arena, are only taxed 10 percent of their GGR. In theory, this means that GambetDC would bring in almost five times the tax revenue for the equivalent amount wagered through a private book.
The law that legalized sports betting in the district required a two-year review, originally due May 3, but postponed until September. The numbers from this audit reflected many of the aforementioned issues with GambetDC, but an even bigger one in terms of the revenue that the city’s own sports betting platforms actually returned to the district’s tax coffers.
GambetDC had gross gaming revenue of $ 5.52 million, according to the audit, which ran over an 11-month period from May 1, 2020 to March 31, 2021. An OLG spokesman confirmed this number City Gazette. According to the city’s contract, 42.5 percent of this amount went to Intralot. Another $ 1.15 million was then paid out to bettors in the form of promotional bonuses and bonus games. Of the remaining $ 2.024 million, an additional $ 1.588 million went to Intralot to cover marketing expenses, credit card and transaction fees. That left the city with only $ 444,398 in actual tax revenue.
Understandably, the focus of the audit was on this low gross tax revenue figure and the only $ 1.8 million drawn between all operators. That is far from the more than $ 25 million per year in taxpayers’ money that was estimated when the draft law was first presented. But the really blatant number here is the percentage of GambetDC revenue that got into the city coffers.
That $ 444,398 represents just 8.05 percent of the GambetDC platform’s gross gaming revenue. Not only is this a far cry from the “around 50 percent” from the hearing in March; This is an even lower percentage than the statutory requirement for private operators.
These results question why the city’s agreement with Intralot is built this way. Why is the city initially responsible for covering the additional $ 1.588 million in operating expenses – nearly 29 percent of gross gaming revenue from the review period – for Intralot? Why are bonus payments only deducted after Intralot has already taken over its reduction from GGR? Even just paying out those bonuses first and then giving Intralot 42.5 percent of the remaining earnings would have more than doubled the amount of money returned to DC’s tax coffers and added more than another $ 488,000.
Fortunately, the district has not got stuck in this treaty. There are mechanisms through which the CFO’s office can change it, which has already been done three times. The CFO can also terminate the contract entirely if this is “in the interests of the group”. While OLG responded to the examination by suggesting the prospect of Create friendlier betting lines In order to attract more traffic, these changes, once made, don’t seem to be reflected in the app’s current quotas.
In bets like Over / Under, bettors are often offered a line of -118, which means they have to wager $ 118 to win $ 100. In many other betting forums, these lines are usually -110 or even -105. That might not seem like much of a difference, but consider what it means. At -110, a player would have to win 52.4 percent of the time (11 out of 21 bets) to break even. At -118, a player should win 54.1 percent of the time. For someone who places a casual bet of $ 5 or $ 10 here and there, that difference may not matter. But for the serious bettor – those dropping real money – this can easily make all the difference not only to using a different platform, but also to visiting the illegal offshore sites that legal sports betting is hoped for.
The logic is easy to understand. The worse the odds are for bettors, the less money is paid out in winnings and the higher the percentage the house keeps. However, GambetDC’s overall poor performance during the exam period came about even though the highest percentage was retained one of the states examined, at 17 percent. Compare that with 12 percent in high-end Montana to just 6 percent in Colorado.
It also means that those who use the GambetDC platform are at the mercy of a more predatory system, either due to a lack of information or access to better chances of winning on other platforms.
A former user of the Gambet DC app who wanted to remain anonymous lives in an area designated as a zone in which the app is supposed to work. But it often had to walk several blocks farther from the Capital One arena for functionality. He also announced that some of his colleagues who work in Georgetown will now be cruising across the river to Virginia to place bets – the exact opposite flow of traffic that DC Sports Betting originally promised.
GambetDC’s myriad problems help explain why Caesars Sportsbook far outperformed it in the Capital One arena. In just eight months – beginning August 2020 when it went fully operational – it generated $ 13.856 million in GGR, of which $ 1.386 million returned to the city in taxes. The handle, or total stake, was nearly $ 95 million, almost all in person – less than 7 percent of that came through their mobile app.
If DC’s sports betting contract is changed, it could potentially open the door for private operators to have city-wide access with their mobile apps. Inquiries to the mayor’s office and council members Phil Mendelson and Kenyan McDuffie No answers were given about the possibility of changing the contract by Thursday afternoon. For operators, such a change would be an obvious boon.
“We are unable to comment on any discussions we have had with city officials on this matter,” said Caesars Sportsbook senior vice president of Operations David Grolman told City Gazette. “If there was an expansion, we would of course take the opportunity to give more passionate sports fans access to our mobile sports betting offer.”
Until that happens and GambetDC cannot deliver both a more attractive product to users and a better share of their profits to the city, sports betting revenues in DC are likely to remain well below their projections.