DC Councilmembers Want to Rip Up $215 Million Intralot Sports Betting Contract

Posted on: June 27, 2019, 05:10h. 

Last updated on: June 27, 2019, 05:18h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

Calls are growing within the District of Columbia Council to shred a $215 million contract awarded to Intralot and start again with a competitive bidding process to find a new service provider for the district’s future sports betting operations.

DC Sports betting
DC Councilmember Jack Evans was relieved of his duty to lead Wednesday’s sports betting hearing following a raid on his house by the FBI on Friday and amid questions of his suitability to serve the council. (Image: WTOP.com)

Councilmembers are concerned about the perception of cronyism that lingers from the decision to hand the sports betting monopoly to DC’s existing lottery operator, Greece-based gaming company Intralot, while sidestepping the public procurement process.

The clamor intensified after it was revealed that councilmember Jack Evans — the champion of DC’s sports betting legislation, passed last year — breached ethics rules by advancing the interests of a parking firm without disclosing a $50,000 payment.

Things could be about to get worse for Evans. Last Friday, his Georgetown home was raided by the FBI. Agents were seen to spend several hours searching the property before leaving with boxes containing documents and computer equipment.

Old Boys’ Club?

A hearing of the DC Council Committee of the Whole on Wednesday was supposed to be chaired by Evans, but the long-time councilmember has been stripped of many of his duties due to concerns about his fitness to serve the council.

Instead, councilmembers used the hearing to question the wisdom of forgoing the competitive bidding process — a decision that was made ostensibly in an attempt to get sports betting up and running as quickly as possible so the district could capitalize on the revenue.

But Councilman David Grosso questioned the subcontractors listed in the deal and whether their political connections led to their inclusion. DC law requires operators to partner with at least one local subcontractor, even though there may be little the local company can offer.

In 2009, Intralot won the contract to operate the lottery after partnering with a company called DC09, an entity established by one Emmanuel Bailey and registered to his mother’s house. Bailey is a businessman with connections to several DC Councilmembers.

Intralot Under Scrutiny

The lottery contract became the subject of a federal grand jury investigation, although no charges were ever filed. Evans is alleged to have had links to a lobbying firm that DC09 counted among its clients.

Bailey is once again listed as a subcontractor on the sports betting contract, as is the law firm he hired to lobby for sports betting in DC.

“Now we see a contract before us containing subcontractors with even more significant political connections and poor track records…” said Grosso, as reported by local radio station WTOP.

Yet we don’t know what the subcontractors’ scopes of work will be or how much they’ll be paid because it’s been withheld from the public. This still reeks of pay-to-play, even more now than before.”

Meanwhile, Councilmember John Ray questioned Intralot’s financial performance.

“How much money is it costing the district to finance this very weak financial company?” he asked, as reported by Legal Sports Report. “… If you learned the retirement board was investing your money in Intralot, would you be happy? Would you buy Intralot shares? If the answer to that is no, why would you ask the district taxpayers to invest their money in Intralot?

“Mr. Chairman, you need to take a serious look at this contract,” he added.

The final debate on the contract is scheduled for July 9.