Once the industry is launched, the city hopes to bring gambling out of the shadows and into a legal market projected to bring $17.1 million in tax dollars next year. "In terms of capturing all of the illegal market, I don't think that any jurisdiction can say that they can successfully do that 100 percent," Beth Bresnahan, executive director of the D.C. Lottery said. "But we are going to work to put forth an entertaining and competitive product that captures a large market share."
WASHINGTON - Legal sports gambling in the District has been delayed as city officials prepare and finalize rules and will not be ready for the start of the NFL season in early September as originally planned.
The delay of at least several weeks comes as businesses are still undergoing preparation and officials are working on regulations, including advertising restrictions, licensing requirements and a prohibition on wagers on local college sports. The draft set of rules from D.C. Lottery, which will oversee sports betting, has generated about 100 pages of comments from gaming and sports companies.
"I don't know how long . . . that will throw off the launch," said Beth Bresnahan, executive director of the D.C. Lottery. "But it's important to know that we want to ensure we are responding to comments and concerns."
A 2018 U.S. Supreme Court decision allowed states other than Nevada to legalize sports betting.
Unlike the 10 states that authorized the practice so far, Washington does not have casinos, horse tracks or other traditional brick-and-mortar gambling locations that can expand to include wagering on sports. The new District law instead permits betting at arenas, bars and restaurants and convenience store kiosks, while the city will control a digital app for mobile betting.
City officials won't start accepting applications from arenas and local businesses for sports gambling licenses until September.
Some businesses can obtain provisional licenses 30 to 45 days after submitting applications if they are partnering with established companies such as DraftKings and FanDuel, which already are licensed in other states. Full licenses would take between three to six months, officials said.
Once the industry is launched, the city hopes to bring gambling out of the shadows and into a legal market projected to bring $17.1 million in tax dollars next year.
"In terms of capturing all of the illegal market, I don't think that any jurisdiction can say that they can successfully do that 100 percent," Bresnahan said. "But we are going to work to put forth an entertaining and competitive product that captures a large market share."
The D.C. Council last month narrowly approved a no-bid contract to the Greek company Intralot to develop the sports betting app. Several council members were concerned about suspending competitive bidding rules and about some subcontractor ties to local politicians. But a majority ultimately decided that revenue to the city was too much to pass up.
The Alcoholic Beverage Regulation Administration already has started accepting applications for businesses to update their liquor licenses to permit sports wagering on site, in a process similar to how bars receive approval to add outdoor patios.
Six establishments have taken that first step toward sports gambling: Lou's City Bar, Dirty Water, Duffy's Irish Pub, Lyve, Wet Dog Tavern and the Brig.
No businesses can receive a sports gambling license within a two-block radius of the arenas, which also are likely to operate sportsbooks.
Managers of Capital One Arena, home of the Washington Capitals and Wizards, hope to launch a sportsbook this fall.
Officials from the Washington Nationals and D.C. United declined to comment this week on the potential for gambling at Nationals Park and Audi Field. A 35,000-square-foot retail space near Nats Park, originally envisioned as a sports lounge, could be converted to a sportsbook, city officials have said.
The mobile sports-betting app, which city officials expect to be the most popular way to place a wager on a game, is not scheduled to launch until January 2020.
Intralot, also the city's main lottery contractor, will oversee mobile sports gambling for the D.C. Lottery and provide kiosks to small retailers such as convenience and liquor stores.
Other sports-betting businesses can have apps that can work only inside their physical locations. Intralot's app is the only one authorized for wagers elsewhere in the city, including from home. The app must be designed in a way it can be used only within city limits and not in prohibited federal areas.
Intralot would receive 42.5 percent of gross gaming revenue under the terms of its five-year contract, while arenas and other businesses would be taxed at 10 percent. Intralot's no-bid contract has been the subject of intense scrutiny because the company's local partners have connections to politicians.
Behind the scenes, other businesses are trying to position themselves as go-to spots for in-person betting.
Several sports bar owners say they're still trying to figure out how to obtain kiosks from other companies. They submitted early applications so they could launch quickly.
"Sports is our thing," said Casey Callister, a co-owner of the D.C. Duffy's Irish Pub. "If we are going to compete in this market, we have to have what everyone else has."
Bars are still working out key details, such as how they would split revenue with partners that would provide the kiosks and set betting lines and odds.
"If on paper there's just no reasonable way for a smaller establishment like us to make a healthy profit out of it, we'd have to take another look on whether we want to jump in," said Todd Luongo, the owner of Dirty Water, who is relying on D.C. Lottery for guidance on how to procure touch-screen kiosks. "But on the surface, it seems like a fantastic opportunity."
Jeff Ifrah, a D.C. gaming attorney who leads an online gambling trade association, said national sports gambling operators have already contacted local bars to help them venture into sports betting.
Ifrah is trying to band together 10 local bars that would go it alone by sharing the expenses of sports gambling, such as procuring sports data and processing payments. He said such an arrangement, which hasn't been approved by D.C. Lottery, could be better for local businesses that depend on higher foot traffic to profit from gambling.
"It's hard to convince a bar and restaurant to take a chance on increases in food and beverage revenue," said Ifrah. "The idea is to really help distribute and lessen the burden of the expenses."
Monumental Sports Chief Executive Ted Leonsis, whose company operates Capital One Arena, has been one of the most enthusiastic boosters for sports betting.
"We are going to try to make Capital One Arena the first arena in the country with a sportsbook," Leonsis wrote in a July blog post. "I see this being something like a Genius Bar in an Apple store - a place where fans can learn and understand gaming opportunities, and also bet on live games."