D.C. Moves Ahead With Bill To Legalize Sports Betting

Sports betting is one step closer to becoming a reality in D.C.

A D.C. Council committee has approved a bill that would legalize it, putting the nation’s capital closer to joining the eight states that already allow it, ahead of what’s expected to be on onslaught of others.

Virginia legislators could debate sports betting during their session in Richmond early next year. The issue is also likely to come up during Maryland’s legislative session that starts in January; there are already six casinos in the state, and MGM, which operates one in Prince George’s County, supports sports betting.

The rush to legalize and regulate sports betting comes in the wake of the Supreme Court decision in May that struck down a 1992 federal law that banned it in most every state, with the exception of Nevada.

‘First Of Many Steps’

But the novelty of the issue — and the fact that so few places have established frameworks to regulate it — was reflected during a brief Council debate on Wednesday, where Council member Jack Evans (D-Ward 2) said a number of changes had been made to the bill since it was introduced earlier in the fall, and even more changes could come before it becomes law.

“It’s the first of many steps. There’s at least two more bites at the apple,” he said, alluding to the two full Council votes to come on the bill in December. “I can’t say we’ll get this right on the first try. I hope we do. And if we don’t, we have an opportunity… to make changes to it. This is more of my best efforts to trying to give everyone something.”

Under the bill approved by the committee on Wednesday, private operators could apply for licenses to operate sports betting facilities throughout D.C. One class of licenses would be set aside for facilities located at the city’s five existing stadiums and arenas: RFK Stadium, Nationals Park, Audi Field, Capital One Arena, and the new St. Elizabeths East Entertainment and Sports Arena.

Another class of licenses would allow sports betting at other facilities, like bars and restaurants. The bill also sets up a two-block radius around the stadiums and arenas in which no other betting facility could open.

“The concern is from operators or owners… they put a lot of effort and money into creating a gambling facility [at a stadium or arena], and a restaurant or another location right next door could compete against them at almost no cost. It’s an attempt to help those operators in those facilities,” said Evans.

But Council member Robert White (D-At Large) said he opposed the provision.

“We may be leaving money on the table here by doing this, and giving some exclusive deals to stadiums that were funded publicly, at least in part,” he said.

How It Would Work

Under the bill, regulation of sports betting would be left to the D.C. Lottery, which would also be allowed run its own sports betting operation. For all operators, betting would be allowed in-person, online and via mobile apps, though only the D.C. Lottery’s app would work citywide. Private apps would only work within designated betting facilities.

The city would take in money via license fees and a 10 percent tax on whatever a betting facility earns minus what it pays out to winners. According to D.C. Chief Financial Officer Jeffrey DeWitt, that’s expected to be roughly $91.7 million over the next four years.

The money taken in on a yearly basis would be split evenly to pay for violence prevention programs under the NEAR Act, and the other half to cover the cost of a new bill to expand affordable child care options in the city. An additional $200,000 a year would go to fund gambling addiction treatment.

One point of contention in recent weeks has been a royalty requested by some of the sports leagues, including MLB, the NBA and the PGA. They’ve asked all operators to pay 25 cents for every $100 bet, which they say would cover the cost of them providing exclusive data and trademarked content to betting operations in the city.

Evans said Wednesday that D.C. would be the first place to require such a royalty be paid, and he believed it was too high.

“What I’m trying to do is a balancing act. I would like to help the leagues. They do provide an enormous amount for sports gambling to proceed. But I cannot provide what they want,” he said.

Council member Vincent Gray (D-Ward 7) successfully pushed to remove the royalty fee from the bill, saying he didn’t believe major sports leagues needed the money.

“I believe these sports leagues are very well-heeled, and they don’t need another quarter percent of revenue that will go to support violence prevention and [early childhood education],” he said.

The leagues — along with casino operator MGM, the Washington Nationals and Monumental Sports, which owns the Capitals and Wizards — also unsuccessfully lobbied for 10 licenses for mobile and online sports betting, instead of giving only the D.C. Lottery the chance to operate citywide. And they asked for a five-block radius around the stadiums and arenas; the bill set it at two blocks.

Critics outlined their opposition to sports betting during a public hearing last month, telling the Council that revenue projections could be overstated, and that gambling can be addictive and seen as a regressive tax on low-income residents. While Evans has argued that D.C. should legalize sports betting quickly because surrounding states may do so themselves, some of the critics’ concerns did influence the vote of at least one legislator on Wednesday.

“There are going to be some clear benefits. The revenue will go to two important programs. You certainly can’t argue against that,” said Council member Elissa Silverman (I-At Large). “The question is who benefits beyond that?”

Silverman opted to vote “present” on the bill, saying it represented her position that while there are pros and cons to sports betting, she’s still trying to navigate them.

“You can argue either way on some key aspects of this legislation, and that’s where I am right now,” she said.

A first vote in the full Council is expected Tuesday, Dec. 4, and a second and final vote before the end of the year. If the bill doesn’t make it through the Council before the end of the year, it can be re-introduced next year.

In a statement from her office, Mayor Muriel Bowser said she backs the sports betting bill.

“The mayor supports Council member Evans’ efforts to make sports betting a viable revenue source for our growing needs,” it said. “Sports betting can help us fund critical programs, create jobs for District residents, and allow visitors and commuters to further participate in our economy.”