FanDuel Officially Replacing GambetDC in Washington, D.C.

Posted on: March 11, 2024, 03:07h. 

Last updated on: March 12, 2024, 11:31h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

It’s official. FanDuel is taking the reins from GambetDC as the lone sports wagering mobile application in Washington, D.C.

FanDuel
The FanDuel Sportsbook logo. The gaming company will officially replace GambetDC in Washington, D.C. this spring. (Image: Flutter)

The Office of Lottery and Gaming (OLG) announced the change following recent speculation regarding such a move. Greek gaming company Intralot will maintain its contract with the city and farm out operations of the betting app to FanDuel.

FanDuel’s industry-leading offering will ensure that the district maximizes revenue under its existing contracts this year while delivering a best-in-class experience for 18+ residents,” said OLG Executive Director Frank Suarez in a statement.

FanDuel, which is one of the most widely used sports betting apps in the country, is expected to launch in the district in the spring. but a specific date wasn’t included in the statement.

FanDuel Move Smart for Washington, D.C.

The district’s contract with Intralot wasn’t subject to a competitive bidding process, and that was merely the start of a controversial run for GambetDC.

In the roughly four years since its inception, the app generated $8.5 million in tax revenue for the city while being subject to heavy criticism for consistently offering poor odds and occasionally floundering during marquee sports events. GambetDC was such a dud that many bettors in the district opted to go to Maryland and Virginia to wager from their mobile devices.

The economics of the FanDuel relationship are far better for the city. FanDuel, a unit of Flutter Entertainment (NYSE: FLUT), is guaranteeing the district at least $45 million in revenue. That sum consists of a $5 million conversion fee to replace GambetDC and $10 million in annual tax receipts for the four years starting July 2025.

FanDuel believes it will generate $119 million in taxable revenue in Washington, D.C. over the next five years. That’s more than the forecast $10 million from the current system, and nearly double the expected $62 million if the district allowed multiple gaming companies to offer mobile sports wagering there.

The operator also expects that many of the current GambetDC retailers will see revenue increase 1.5x to 2x upon conversion to FanDuel kiosks.

FanDuel Already Dominant in the Region

One of the primary reasons OLG wanted Intralot to consider a subcontractor is branding. Though a specific regional mark, GambetDC didn’t resonate with local bettors on par with a major brand such as FanDuel.

Not only is FanDuel one of the two largest sports betting apps in the U.S. (DraftKings is the other), it’s already familiar to Washington clients. The operator runs a retail sportsbook at Audi Field and has marketing agreements with some local professional sports franchises, including the NFL’s Washington Commanders.

Additionally, FanDuel already has roughly 50% market share in Maryland and Virginia, having generated $265 million in gross gaming revenue (GGR) in the former and $256 million in GGR in the latter. That’s relevant because the operator estimates it has 20K users in Washington, D.C. who have accounted for $15 million in GGR in Maryland and Virginia. That’s because they’re traveling to those states to bet instead of using GambetDC.