Posted on: March 4, 2022, 06:51h.
Last updated on: March 4, 2022, 06:51h.
Washington DC’s sports betting app, GamBetDC, booked a $4 million loss in its first full year, DCist reports. The DC Council said in February 2021 had expected the platform to bring in $6.2 million for the district.
Those disastrous numbers have prompted the DC Council to revise tax revenue expectations for next year when it hopes to make a profit of $1.5 million. It’s still a drop in the ocean compared to the $27 million that former DC CFO Jeffrey DeWitt projected for 2021 back in November 2018.
Lottery officials told the DC Council that marketing costs had pushed the app into the red. They said revenue estimates had been wildly inflated because they were working with “very limited data” in 2018. Although presumably DeWitt knew what the district’s population was then.
DC Lottery director Frank Suarez admitted Thursday that you would have to multiply the population tenfold to get “anywhere close” to DeWitt’s numbers, as reported by DCist.
Super Bowl Howler
Still, it doesn’t help that operator Intralot fumbled the ball on Super Bowl Sunday, by far the biggest betting event of the year.
The operator made a technical mistake when it submitted an app update. This rendered GamBetDC inaccessible to iPhone users on the big day, That’s more than of half its registered customers.
Suarez conceded the blunder had caused the app significant “reputational damage,” as well as financial, and the Lottery was currently negotiating compensation with Intralot.
The DC Council’s decision to go for a high-hold model may also be contributing to its underwhelming performance. “Hold” refers to the percentage of bets the operator keeps after winning bets are paid out.
The council said the model was chosen to “maximize revenues” for the district, but it also means GamBetDC has been offering some of the stingiest odds in America. Despite the council’s optimism, offering odds that are over-juiced compared to competitors in neighboring states, not to mention the black market, is unlikely to be a winning ticket.
Suarez Thursday said the payout percentage had recently been increased to make the app more competitive with private sportsbooks.
DC does allow some private mobile and land-based sports books, but these are geofenced to within two blocks of partner sports stadiums. Some bars and restaurants can apply for retail and mobile licenses, but mobile betting must not extend beyond the walls of the venue.
DC’s decision to award the district-wide mobile betting monopoly to Intralot in a $215 million no-bid contract was controversial. A whiff of cronyism still lingered over the lottery contract the council handed Intralot back in 2009, which became the subject of a federal grand jury corruption investigation.