D.C. Managed To Lose $4 Million on Its Own Sports Betting App
Despite having a near-monopoly on districtwide betting, poor decisions and mismanagement led to millions in losses on GambetDC.
In gambling, the house always wins. Unless the house is the Washington, D.C., government.
Like a growing number of cities and states, Washington, D.C., allows sports betting. However, bets may only be placed within the confines of designated venues. The only means of placing a bet that is available districtwide is GambetDC, a website and app run by the D.C. Lottery. Reason's Jason Russell described GambetDC as "glitchy," with lower payouts than privately-run betting houses.
Now, as part of a performance oversight hearing, the lottery is claiming it suffered a bad beat.
After the D.C. Council approved sports gambling in the district in 2018, it further authorized a single company to develop the GambetDC app, at a cost of $215 million over five years. In return, the District hoped to see annual tax revenues of $20 million from bets placed. Instead, the lottery admitted this week that the D.C. government only took in about $1.5 million from the app in 2021, its first full year of operation. In fact, after adjusting for the cost of advertising the app, the government actually lost more than $4 million last year.
How is this possible? More than just a glitchy interface, and beyond the decision to spend more than $6 million on advertising, the service was simply unreliable: During this year's Super Bowl, the app was down for iPhone and iPad users. Kenyan McDuffie, who represents D.C.'s Ward 5, expressed concern that the app could see a similar issue with March Madness coming up.
As with many vices, it is better for gambling to be legal than illegal. But the best bet of all is for the government to leave the actual infrastructure of gambling to private parties. In 2021, as GambetDC was hemorrhaging money, Capital One Arena's betting facility earned $1.8 million in tax revenue. Clearly, D.C. should quit while it's behind and leave the table.
