DC Officials Concerned About $215m Sports Betting Subcontractors

  • Sports betting is coming to Washington, DC, at private establishments and sporting arenas
  • Intralot will be the sole provider of mobile and retail sports betting in the non-sporting arena venues
  • The sporting arenas can choose their own operators and will have a two-mile radius exclusivity zone
  • There are concerns that several subcontractors that have links to DC politics
  • The DC Council has until July 25 to review and approved the $215m contract
US Capitol Building in Washington, DC
There are concerns about political links to subcontractors for DC’s $215m sports betting contract.

Sports betting in Washington, DC

Washington, DC, rapidly advanced the Sports Wagering Lottery Amendment Act that was introduced on December 4, 2018, by Councilman Jack Evans. The DC Council approved it by an 11-2 vote and Mayor Muriel Bowser signed it into law on January 22. This is a process that often takes months in most regions in the country, but it only took a few weeks in the nation’s capital.

After the mayor signed it, there was a mandatory 60-day review period because the bill will have a fiscal impact. The DC Lottery will regulate the sector and will also be the only main operator for sports betting in the district. This has been a point of contention because a lot of people wanted an open bidding process for the licenses.

Operation of the sportsbooks

Intralot will be the actual operator of the sportsbooks and will develop a mobile sports betting app. Sports betting will be available at private establishments, such as bars and restaurants around the district. In addition, major sporting arenas can use their own chosen operators to offer sports betting. They are the Capital One Arena, Audi Field, Nationals Park, and the Saint Elizabeth’s East Entertainment and Sports Arena.

The license fee will be $250,000 (£197,000) and each license will be valid for five years. They will have an exclusivity radius of two miles in which they can operate without any competition. While there are still a few regulatory kinks to iron out, sportsbooks should be open in time for the start of the NFL season in September.

Concerns about subcontractors

Officials in DC have recently made a $215m (£169.5m) proposal for the sole source contract for sports betting and the lottery operations in the district. There are concerns that a number of individuals with political connections and company executives with a controversial past have links to this proposal.

The reason given for not having an open bidding process was that they wanted a quick launch in order to maximize potential tax revenues. There have been negotiations with Greek gaming firm Intralot for several weeks. This led to DC Chief Financial Officer Jeffrey DeWitt sending a proposed five-year contract to the DC Council last week. It lists seven companies that would be subcontractors.

Other subcontractors

The subcontractors would be responsible for over a third of the entire $215m contract. One of the subcontractors is Emmanuel Bailey, who was also part of the previous DC Lottery contract. Bailey hired a law firm to lobby the DC Council and is another subcontractor: Goldblatt, Martin and Pozen. District Services Management is the third subcontractor proposed.

Their executives recently lost the city contract for looking after the homeless through their operation of Life Deeds. They lost these contracts after allegedly falsifying personnel records. Life Deeds claims that it was the fault of a vendor and that they will appeal these findings.

Octane, another subcontractor, has links to Everett Hamilton, a public relations specialist who was on the communication team for the initial mayoral run by Bowser, as well as for current DC Council member Brandon Todd. Mark Jones is listed as a subcontractor as part of his M. Jones Companies firm. He was the deputy director of the DC Lottery at the end of the 1990s and was on the state board of education, representing DC’s 5th Ward, until 2019.

Some in DC are uneasy about the connections the subcontractors have to DC politics. Others have concerns about the lack of a competitive bidding process. There are also questions about Intralot’s financial health because the company’s rating was recently downgraded by credit agencies.

There is a deadline of July 25 for the contract to be approved by the Council. This is the usual 45 day review period for such contracts. It will then take the lottery officials about six months in order to launch their mobile sports betting app. However, private establishment sportsbooks likely will be open from September onwards.