FanDuel takes D.C. as lottery gives up on Gambet

The letter does not indicate when FanDuel might launch its platform citywide, however. 

Dated 8 March, the letter confirms the OLG has “approved Intralot’s request to select FanDuel as a new subcontractor” for the lottery’s sports wagering platform.

Intralot, which contracts with the District of Columbia, has struggled to put out a competitive product in GambetDC. The platform lost $4 million in 2021.

“OLG and Intralot have evaluated the current platform and believe that FanDuel and its industry leading platform will perform better within the highly competitive DMV region,” OLG executive director Frank Suarez wrote in the letter. “Having a national, market-leading platform will help to quickly improve the player experience and drive significant revenue growth.”

District won’t have to pay operating expenses

When FanDuel takes over, the OLG will no longer be on the hook for operating expenses of $2m to $4m per year, according to the letter. FanDuel will handle payment processing, promotions, marketing, and retailer commissions.

The operator will pay the OLG a $5m “platform conversion fee” within 37 days of signing a contract with Intralot. If OLG extends its contract with Intralot, the city would get a guaranteed $10m in revenue over four years beginning in July 2025. 

In the current situation, GambetDC is available via digital platform and on kiosks at lottery retailers. That platform will disappear in favor of FanDuel’s, and kiosks at 63 lottery retailers will be replaced with FanDuel equipment. 

The new contract means that FanDuel will be available across the DMV, as it is already live in Maryland and Virginia. According to the letter, FanDuel has “approximately 50% market share” in Maryland and Virginia. It has market access in the District via a partnership with the DC United Soccer team and runs a retail sportsbook at Audi Field. 

No competitive bid process

Operators in D.C. are only allowed to offer their digital platforms within a limited zone around their retail partner’s location. BetMGM, for example, has a partnership with the Washington Nationals. Its the platform is available at and around Nationals Field, but geofenced from the rest of the city.

Intralot and GambetDC have been under fire over the last year as the D.C. City Council discussed ways to increase revenue and whether Intralot should be replaced.

Intralot initially got the contract with the OLG as an expansion of its lottery contract, without a competitive bid process. By subcontracting to FanDuel, Intralot again avoided a competitive bid process. 

Since going live in May 2020, GambetDC has paid the District $8.5 million in taxes.

Original article: https://igamingbusiness.com/sports-betting/online-sports-betting/fanduel-takes-dc-lottery-contract/