Surprise Alliance of Leagues and Operators Emerges to Fight Threatened Intralot Sports Betting Monopoly in Washington DC

Posted on: December 4, 2018, 06:40h. 

Last updated on: December 4, 2018, 06:24h.

Philip Conneller @casinoorgphilc Read More

Expertise: Gaming Business, Regulation, Tribal Gaming.

MGM Resorts, DraftKings, and FanDuel have joined forces with the NBA, MLB, and the PGA in a bid to impose shared interests on Washington DC sports betting legislation. It’s the first known instance of sports betting operators and leagues — two groups whose interests have not always aligned — entering into joint lobbying efforts.

The two groups are working together apparently in an effort to prevent the DC Council from handing a sports betting monopoly to its Greek lottery provider, Intralot.

DC Council’s plan to regulate sports betting has the backing of the majority of councilmembers, as well as the district’s mayor, Muriel Bowser. The council has set a date of December 4 for a first reading of the bill and hopes it will go to a full vote on December 16.

Since DC has no casino interests, the task will fall solely to the DC Lottery to “partner with vendors to offer in-person and online sports wagering,” per the draft legislation.

Intralot ‘Exaggeration’

But operators are concerned that the Lottery could choose to offer sports betting exclusively through Intralot. According to documents seen by Legal Sports Report, Intralot has claimed it could generate revenues for DC that are up to 30 times more than an open model could produce, which LSR describes as a “vast exaggeration.”

The Washington City Paper reports that the new lobbying alliance is circulating a flyer around the Wilson Building, home of the DC Council, urging councilmembers to consider an open market.

“A competitive market will allow operators to partner with the District’s small businesses and spend major marketing dollars and at local businesses, creating jobs and contributing more money into the local economy,” the reads the flyer.

Shock Support for Integrity Fee

But perhaps the most shocking aspect of the flyer is that it supports a .25 percent “integrity fee” on betting handle for the leagues — although it does not call it by that name.

“Giving sports organizations a direct financial interest in the new betting market will create a massive benefit to the District and the D.C. business, as it will form a strong partnership among local government, betting operators, and the sports leagues, as the leagues — with their unparalleled sports fan reach and exclusive access to content — will be incentivized to support the District’s sports betting market and drive its success,” it reads.

The so-called “integrity fee” has been a major sticking point between leagues, operators, and states who have regulated thus far, and the operators’ willingness to swallow the fee in DC highlights how desperate they are to avoid an Intralot monopoly.

The DC council itself rejected the integrity fee at a committee hearing last week.