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There is arguably no U.S. sports betting market that has faced more criticism than Washington, D.C. It appears to be a new dawn and a new day for the district, though, as a change in laws is opening up the online betting market at last. We'll discuss how the law changed and what to expect, then we're going to take on some pretty harsh criticism of the entire U.S. betting industry from none other than pro better Billy Walters. Buckle up, it's going to be a bumpy episode of iGaming Daily. iGaming Daily is presented by OptiMove, the number one CRM marketing solution for the iGaming market. You can still get that first free month. Go to OptiMove.com forward slash SBC or click the link in the description below. I'm Jessica Wellman, editor of SBC Americas, joined by media manager Charlie Horner. Charlie, it's a sad day for me and I think for you because we rather enjoyed Council Member Kenyon McDuffie. arguing with the Washington DC lottery over how badly they were mismanaging sports betting and we're not going to get those heated discussions anymore. No, it's a shame. At least in theory, I guess. Yeah, I mean, there's always hope. But yeah, it's a big day over in DC. Election aside, really the excitement sports betting. Forget about all of that in November. This is where the real story is. Exactly. It's all changing sports betting. Yeah, so... For those who didn't follow, I don't think we've ever talked about DC sports betting on here. For the first kind of four years that it was around, DC decided to do a lottery monopoly kind of model where they made a contract with Intralot, who was primarily a lottery supplier. And they were the sole provider of online betting. But you could do retail betting at Capital One Arena and Nationals Park. And I think within a two block radius of those two stadiums, you could get Bet MGM and Caesars. That has since changed. So step one, after four years of this model failing, I can't think of anybody that missed revenue projections by this much, by the way. First four year initial expectations were 85 million in revenue. The actual number of what it generated. You wanna do the honors, Charlie? Yeah, yeah, sure. It was at 4.3 million. Yeah, just 5% of what we thought we were gonna do. So, not great. And the problem with Intralot, it was a clunky app, but also it was the only app that I've seen do heavier than minus 110 lines. You know, sometimes you see that a little bit in certain markets. It depends. But just like in general, the VIG was noticeably higher on this app than anywhere else in the US. So people would rather they were traveling to the stadium. And like people in D.C. have told me traffic is not fun there. Imagine being like, I would rather deal with the traffic. Then bet on this app. Yes, the app must be really. poor for people to go through the effort of sitting through traffic and crossing state lines and going to stadiums and things like that. Yeah. Rough. Or you can drive to Maryland, Virginia. Virginia, maybe. All of the other surrounding states that fall in there. Delaware, I guess. Anyways, so the lottery's fix for this was, well, let's keep working with Intralot, but Intralot has found Fandual to subcontract our contract with Interlot. And this was happening at a time where it was about time to re-up that contract. And Councilman Kenyon McDuffie, one of my favorites, was just like, why are we re-upping with these people who clearly suck? And the lottery, Frank Suarez was the head of DC Lottery, he has since moved on, was saying that this made more sense because it was. The transition would be difficult and the RPF would take too much time. So they did make that switch. And in the first month, Vanduul did 1.9 million in revenue, which is about 40, 45% of what Interlot had done in four years. We didn't stop there though. Things have changed once again. Kenny McDuffie had been trying for some time to open up the market online and he managed to successfully get that tacked on as part of DC's budget. I think we've talked about this before. The easiest way to get your bill passed is to get it tacked onto a piece of legislation like a budget that kind of has to happen no matter what and allowed for people to move into a license that allowed them both retail and online betting. Since then, we have seen Caesars and BetMGM launch and we've also seen FanDuel will now pivot. from the lottery license to a retail license where they will not be in a revenue share agreement with the lottery anymore. Just a quick note on the procedure to make this happen. I think personally attaching it onto a state budget isn't the worst thing or the most controversial thing in the world because essentially it is a mechanism of bringing extra tax dollars into the state. As we've already touched on. 4.3 million in revenue for Intralot across four years. I don't think, nothing, DC are taking much money in from that. So yeah, making a budgetary move, I guess is a pretty wise one. Yeah, it's because it's a tax revenue generator. That's how it kind of makes it in the budget. You outlaws wearing socks because it doesn't generate money for the district. But because this was a revenue generator, that's how it gets kind of tacked into the budget. What was interesting about this one, I'm going to teach you a real random piece of civics today. So the District of Columbia is not a state. When it has a budget, it has to be approved by the council. Then it goes to Congress, like federal Congress. and they have to approve the budget. And then it goes to the DC mayor for signature. And in this instance, Mayor Bowser did not sign the budget. She kind of let it just pass without her signature, which I was saying I was talking to Justin Byers about this. I I've seen plenty of lawmakers, governors not sign bills. Don't think I've ever seen them not sign a budget. That feels new to me. Yeah, that's very strange. Again, if it's just a single issue bill and they're not necessarily in favour of it but it's passed through the chambers, then fine. But a budget seems wild. Her issues with it have nothing to do with sports betting. There were some tax hikes in there that she felt were unduly burdensome to the residents of DC and that's why she didn't prevent it from passing and she didn't send it back and demand changes. She just didn't sign it and let it kind of latently pass. So I'm gonna say the big loser out of this besides, you know, Intralot might be Fandool. Fandool went from having a monopoly on the online betting market where they were, their projections for five years were 119 million in revenue that they would share with the DC lottery. I don't know what the numbers are gonna be now that they've had to pivot to a competitive market, but you've got now Fandle, Caesars, BetMGM, DraftKings has announced it is working with DC United to enter the district. They opened things up. Initially you had to be tethered to the venue and the new law seems to allow that you can now partner with teams and that'll allow kind of more operators to come in the space. I don't know how many more really will. It's not the biggest market and as we've seen in other places, you really top out at like six or seven brands in the most beneficial of circumstances. But yeah, so they're competing with their three biggest rivals versus having it all to themselves, which I have a feeling they're not thrilled about. They did file a letter opposing this legislation saying, hey, you know, we can bring you all of this and do this. and we won't be able to do that for you if you switch. Yeah, well, they send up something with materially different terms. Yeah. But I guess it's politics and things can change and it's not always in your favour. And you've just got to kind of roll with the punches. It's not ideal because, like, as you said, Jess, DC is not the biggest market. OK, there might be a lot of money swirling around in that district, but, yeah, not the biggest. market to go for and with so many, well, with four operators in there, there's not much to share around. Yeah, population of 670,000 it looks like, so, you know, not huge, but still a good one. And, you know, we will see, we could be proven wrong that this is not going to dramatically improve revenues for the district, but... Like I said in the intro, I can't think of a market that has gotten more criticism and underperformed more than DC. So I think there's no way to go but up personally. Yes, I remember it was one of the first US stories I was covering on the site was these complaints of how bad the Gambit DC platform was and how the state officials were demanding sort of essentially an inquiry into why things weren't going as well as they planned. So it's been going on for a while and it's good to see a resolution. Yeah, we'll take a pause right now, you know, DC on the rise and hopefully getting closer to performing better. But when we come back, we're going to discuss somebody saying that nobody in the United States is doing sports betting right. And we probably need just a breather before we dive into this one. All right. Welcome back to iGaming Daily. So Charlie, last week we were off. You were off at IGB Amsterdam and I was at the Nickel Gees Conference of lawmakers. Any highlights from IGB Amsterdam before we get into my trip? Well, it was the final edition of IGB Live in Amsterdam. And I think there was quite a celebratory mood about that. And it was, yeah, a lot of people there to wish Amsterdam a goodbye from the conference circuit. A lot of meetings, a lot of conversations. I didn't really get to see much of the conference content. At Nickel G's, you know, most of us, there's only ever one panel going at a time. So most of us actually do attend most of the panels. And certainly the one that everyone was most excited about was the panel featuring Gadoon Kirolos, Spanky, as you may know him. We certainly talked about him on this podcast before, as well as Billy Walters, who is arguably the most- famous better in the United States. His memoir, Gambler, came out last year. New York Times best seller. He's a guy that kind of transcends betting. Even if you don't know betting, you might know who Billy Walters is if you're a sports fan. And I was shocked at what Billy Walters had to say about the business. Let me preface this though. I think the reaction in the room to what he was saying was wildly different. There was a group of us that were like, extreme opinions and then there were several people though that thought that it was really informative and helpful and cast an eye on the industry from a point of view they haven't heard as much. So I wrote it up on Monday and I've got to say like if there's anything he likes less than the US sports betting industry it's the British sports betting industry so I hope you didn't take too much offense. Yeah I was reading and we were talking off air and I was thinking this is this We're always being blamed for ruining the world and now we're blaming... 10,000 people for what it's heading to. ..US sports betting. So yeah, no, it's very interesting. His exact quote, they don't understand booking American sports of British bookmakers. Well, I mean, I can't speak for all British bookmakers, but I can speak for one British man and I can probably testify to that. I don't know US sports that well, but... Maybe if I play the role of the listener here Jess and just ask you to explain what it was in general that Billy Walters was saying about US sports betting in general. Yeah, so the European model of sports betting is generally described as you just ban anybody who's successful. you extremely limit successful bettors or you tell them, we don't wanna take your business anymore. And the big limitation from the entire group was that this mindset has taken hold in the US and bettors who would like to bet in the regulated space as opposed to offshore are being denied the opportunity because they are successful. I think that. is the most valid criticism at the heart of all of this. He would love to see posted limits, posted mens and maxes, which Circus Sportsbook does. I don't think a couple others, maybe Prime Sportsbook does this as well, but most that number kind of varies customer to customer. He would like to see transparency. I think that's a totally reasonable thing to say. We've seen Massachusetts and in particular look into limiting and transparency and they're going to be having a meeting about that coming up where the operators actually will attend this time versus the first one where they no showed. So that, all of that made sense to me. Although he did say something about posting true odds next to the betting odds. And I can't think of an operator in any jurisdiction that actually lets you know the statistical probability of something happening next to the price. of, it just doesn't exist. That can open a whole can of worms. The stuff that was a little wild, suggesting that in the 30 plus states that have legalized sports betting, that all of these discussions took place with no one who understood sports betting, that to me, I'm like, you're in a room full of lawmakers who were part of this process. and you've just told them you think they know nothing to their face. Yeah, it's bold. It's definitely bold. I'm like, read the room, Billy. Come on, this is not the tone you need to take. Apparently I'm the only one. I was one of the only people who thought that was out of line, but yeah, there was that piece of it where, and what he's talking about is he really reveres Jack Binion in particular. He said it was his best, was his best friend. Jack Binion's still alive, right? I don't remember which Binions have died, to be honest. Whichever Binion is still kicking, he's best friends with. Those Nevada bookmakers that we've inducted seemingly all of them into our Sports Budding Hall of Fame, they really took all comers, they didn't deny action, and that sort of thing, that to him, those are the people who know what they're doing. He referenced the offshores as being able to book successfully. when others can't. Here's a great quote from him talking about transparency. If they can't operate like this and be profitable, maybe they shouldn't have a license because I know lots of people that can. Referring the next sentence, he mentions offshore. So he's talking about offshore sports books and I'm like, well, yeah, of course they can. You can bet on credit. You can take whoever and not have to worry about if they're actually 21 or if they're laundering money or if they're a criminal. Yeah, they probably can take whatever action they want without the limitations of a regulated market. But I don't know if sports betting, if the standard I'm betting the game at minus 110 lines, I don't know if that industry even still exists anymore in the United States. No. And when I was reading this, and it's a really interesting piece, I would really recommend it. It's linked into the podcast, by the way. Open the link description and we'll have it. Absolutely. Who is Billy Walters speaking for here? Is he speaking for the casual recreational US better? Because to me and with some of the operators that you've kind of mentioned in this sort of discussion, you've mentioned that some of the things that he's asking for, the likes of Circa and Prime are implementing these practices. Is this not him speaking for the so-called sharp betters and those who want to go pro with this kind of thing? Yeah, so he and Spanky are forming a nonprofit called the American Butters Voice. And Rufus Peabody tried to do something like this previously as well. My question to all of them is like, do your interests align with my friend who bets a hundred dollars total a week during NFL season, largely on same game parlays? I just don't believe that those interests intersect. Because guess what? I don't really see Nevada bookmakers taking a bunch of SGPs and stuff. And that's what people like to bet now. It's a different ecosystem. It's people that enjoy a different kind of betting. They view it as a lottery. They don't care about pricing. They're less price sensitive. But I just don't. As I tweeted, this felt like the last scene of Casino, a movie I'm sure Charlie has never seen, but you guys, we have a Cinema Reels episode about it. The last like, coded to this movie is basically lamenting that Vegas has been corporatized and cleaned up and now the cocktail waitress doesn't know your name. Kind of ignoring the fact that this was an era where like- criminals were operating some of these sportsbooks and like if you didn't pay, they would take you out back and shoot you. I'm fine with a cocktail server not knowing my name if it means that I'm going to leave alive from the property that I am at, but that's just me. So it felt a little out of touch. I will say what was also kind of wildly out of touch to me was this argument that nobody is happy with the results that sports betting revenues have done so far. Listen, we just ripped apart DC. There are a couple of markets that have underperformed, but you know, those markets, it was like a monopoly model. It was a bad vendor. It was something, it wasn't. If you have an open market for the most part, or a largely open market with tethered licenses where most anybody who wants to get in can get in, pretty much every state has landed on the money or ahead of what expectations were gonna be. Massachusetts delivered. twice the tax revenue it was expected to deliver in its first year of operation with one sixth of the operators that were projected to be in the space in the first place. Ohio, now I've got to say they did double the tax rate six months in, so this is take with a grain of salt, but they tripled tax revenue projections in the first year that they were operating. Kentucky, we're scheduled to be, we're running ahead of schedule on what revenue projections are. I don't believe the argument that US sports betting is unhappy with the numbers it's producing. No, and I think that's driven by the fact that there is a higher—sports books are taking a higher margin than they previously expected when a lot of these bills were being passed. Yeah, hold on a minute. And that is driven by this recreational player who— as we've mentioned, likes the same game parlays, they're placing these bets that they realistically know probably aren't going to come in. And it is driving extra tax dollars for the state, which seems to go against the entire argument that Walters is making. Yeah, I mean, the operators are doing, are holding better than they thought, handles ahead of what it's thought, tax revenues ahead of what it's thought. We're running out of time but I have to end on this. Here's what- what Billy Boy believes is really going to open up the market. He would like to see us overhaul how you pay gambling taxes in the United States. You're a Brit, which the only thing he likes about your system is that you don't pay taxes on gambling winnings. He did give you guys that. I've had two big poker caches this year, both of which triggered tax forms. I'm going to have to pay a certain amount of taxes on that. And then next year, if I were to lose $40,000, I'm not allowed. to carry that forward to the following year. There's no carry forward on losses in gambling because it's not a job. No, no. Even though some people treat it as such. So he would like to see carry forwards, he would like to see lower taxes. And in his mind, this will unlock a whole fleet of people who previously would only bet $5,000 a game on something to bet. a hundred to two hundred thousand dollars a game on things. And perhaps I am understating the importance of whales in this business. I do understand like large bettors make up a huge chunk. You look at the New Jersey revenue that arguably was just one high roller switching from points bet to draft kings. But like, I'm just hard pressed to believe that one, there's hundreds of people out there that. have enough liquidity in their life to bet five grand a game, and the appetite to 20 to 40x that bet size, and the two, anybody in this room full of lawmakers and regulators thinks it's a good idea to encourage that. So again, I think he, to me, it was just, it was fascinating. I was riveted, but it was some interesting suggestions and a seeming lack of understanding of who he's talking to. I would concur. I think, yeah. Yeah, I can send you the whole audio if you want, because it's a riot. With that, we are way over time because I just can't stop talking about how crazy this was to be in the room hearing. It's interesting criticism. You can check it out on SBC Americas. Lots of features on SBC Americas this week. Charlie, anything elsewhere in the network people should look out for? Yeah. As the resident Brit on this podcast, I would like to send everyone's attention towards a couple of features that we've done this week, one with Bet365 and one with Every Matrix. Looking back at betting insights, both on the European Championships but also Copper America as well, which both culminated last week. So if you're interested in soccer and you want to see some of the key betting insights, check out those features. They're both on the SBC News. Our words are not Billy's words. So keep tuning in each and every day for all the latest and greatest online gambling news at iGamingDaily.