At a recent panel discussion entitled “The Future of Everything,” Ted Leonsis talked about how gambling is going to fundamentally change the way fans watch sports, whether they’re in the arena or watching from elsewhere.
When it comes to the explosion of legalized betting sweeping the nation in the wake of last year’s pro-gambling Supreme Court decision, the Washington billionaire has become one of the most evangelical of all professional sports franchise owners on the topic of sports betting.
“Whenever you bring things into the sunlight, it’s going to be better,” Mr. Leonsis said at the May 21 event, according to the website SportTechie, making his argument that gambling, properly policed, will benefit owners, athletes and fans.
For Mr. Leonsis and his Washington Capitals and Wizards (he also owns a WNBA franchise and one of the top teams in the growing esports industry), the future is quickly becoming the present.
With some plans finalized and others tentatively approved by the city government, would-be sports-book operations are racing to have legal betting operations up and running by the start of the football season.
The fast track
D.C. acted quickly to legalize sports gambling after the Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA) — the federal ban on sports betting. In the months after the court’s decision, eight states have legalized sports betting.
After Councilman Jack Evans introduced his sports betting bill last December, the D.C Council passed it just weeks later — and Mayor Muriel Bowser signed it in January. In February, the process was fast-tracked further — a sole-source contract was awarded to Intralot, the city’s lottery vendor, to run the city’s online services for sports betting.
If things go as planned, in-arena betting is expected at both a site at Nationals Park and at Capital One Arena, the home of Mr. Leonsis’ Capitals and Wizards.
For betting off-site, or over a phone or online, there are still steps to be taken before implementation — the city needs to find a company to design a mobile application, for example. But the public will eventually be able to place wagers at sports venues, restaurants, convenience stores and through the app.
“The city and the states are recognizing the huge amount of revenues they could be making off of sports gambling,” said Michelle Minton, a senior fellow who specializes in gambling policy at the Competitive Enterprise Institute. “Previously, it’s all been in the black market and there’s potentially hundreds and millions of dollars to make off legalizing the activity and giving consumers the way to move out of the black market into the legal regulated market.”
The District and other states are starting out behind states like New Jersey, which had its sports-betting apparatus ready to go as soon as the Supreme Court cleared the way last year.
New Jersey resident Bill Vogel, visiting the MGM National Harbor recently while in the Washington area, said he used to place his bets with a bookie. But these days, he grabs his phone and opens up a sportsbook app to wager on sports.
It’s just easier that way, he says.
“You find out because of the ease of it, you start betting on things more than you normally would,” he said.
Mr. Vogel is emblematic of the untapped market Mr. Leonsis and the District government believe exists in Washington and the surrounding region.
“I think D.C. is trying to move really quickly so they can be competitive with the neighboring states that are already offering legal sports gambling or are talking about legalizing it really soon,” Ms. Minton said.
This, perhaps, should not come as a surprise. Dave Forman, the American Gaming Association’s senior director of research, said that states have generated $55 million in tax revenue since PASPA was repealed. He said $8 billion in wagers have been placed in that time.
Eight states currently have sports betting: Nevada, New Jersey, Delaware, New Mexico, Mississippi, West Virginia, Pennsylvania and Rhode Island. Others like Tennessee, Montana, Arkansas, Indiana and Iowa are pending launch.
In the District, the chief financial officer projects nearly $92 million in tax revenue over the next four years — the majority of which will come from mobile betting.
Not every bet is a winner
The city will tax private operators such as in-arena sportsbook 10 %, projecting $6 million in revenue over four years. Most of the money generated will go toward the city’s general fund.
Projections, though, are just that. Ms. Minton expressed skepticism at the city’s figures, calling them “a fantasy” for not including the cost it would take to advertise the service. “It’s always really hard to project (revenue), especially in the future when you have other states on the verge of legalizing, as well,” she said.
According to The Associated Press, four of the six states that started legalized sports betting last year have fallen short of their projected revenue goals. West Virginia, for example, collected only one-fourth of their projected monthly tax revenue.
Through May 4, West Virginia has earned $1.1 million in tax revenue from sports betting for its fiscal year, per public records. They projected to end the year with $5.5 million.
Erich Zimny, the vice president of racing and sports at Hollywood Casino at Charles Town Races in West Virginia, told The Washington Times their casino is still figuring out customer demand.
“Like everybody who is starting this, we’re kind of learning as we go to some degree,” Mr. Zimny said.
“You overestimate and underestimate certain events, the demand at certain times.”
How it could work in D.C.
Mr. Leonsis’ affinity for sports gambling is well-known. The Wizards and Capitals owner wrote on his blog that betting will only bring fans “closer to the game” after the court’s decision last year.
And speaking at the “Sports Betting Executive Summit” in March, Mr. Leonsis mapped out his vision to turn the space occupied by the Greene Turtle restaurant at Capital One Arena into a sportsbook.
“My expectation is that there will be built a very, very high-end world-class restaurant called the Sports Book,” Mr. Leonsis said. “There will be televisions showing games from all over the world and that people will be able to come in and watch games and dine and bet. And that is something that happens all over the world.”
Mr. Leonsis said that depending on the event, the sportsbook could be accessible from inside the arena, as well.
Mr. Leonsis isn’t the only owner in the District looking to get in on the action. The Washington Nationals received approval from Events D.C. to build a 35,000 square-foot restaurant and entertainment venue at Nationals Park. The venue, which also needs approval from the D.C. Council, would feature a bar and lounge area, screen wall, performance area and a rooftop terrace — leading people to believe it could possibly be a sportsbook.
Nationals owner Mark Lerner told WTOP in March that his team had plans to build one at their ballpark.
“It’s going to take a little bit of time, but we’re excited about the opportunity,” Mr. Lerner said. “I think it’s going to be a great thing for the city.”
Each sports venue, too, will have a two-block radius that prevents other entities from placing a sports bet legally within it, if the operators apply for a license. The arenas will also be able to have their own online platform, though it will only be accessible at the stadium and within the two-block radius.
As for implementation, the D.C. Council must sign off on regulations first. Regulations are expected to be up for public comment in June and are expected to be adopted in July.
“It’s surprising just how quickly this has expanded over the last year,” Mr. Forman said. “It’s been a boon to gaming operators and consumers who want an opportunity to bet legally, as well as to state governments who obviously collect tax benefits around a new legal form of entertainment.”