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More than six months after passing an enabling law, the District of Columbia finally has a controversial contract to operate sports betting.
Council members voted Tuesday to approve the sole-source, no-bid contract covering lottery and DC sports betting operations for the next five years.
According to city officials, the $215 million deal with Intralot provides the most expedient solution with the greatest return on its investment. Industry sharps and stakeholders argued otherwise right up until the last vote, but the Greek company had more than just its technology working in its favor.
A string of ethical questions surrounding the bill’s sponsor and his alleged ties to the troubled contractor still linger over the new DC sports betting law.
Interested observers peeking into the legislative process were treated to a spectacle Tuesday. The ongoing investigation into Councilmember Jack Evans dominated the hearing.
The representative from Ward 2 is both the chief proponent of expedited DC sports betting and a man with a few too many connections to Intralot. His business dealings, both in gambling and in other industries, have been the subject of much reporting and an FBI raid in recent weeks.
“The whole thing stinks,” Councilmember Elissa Silverman pointed out. But Evans has friends in high places.
Chairman Phil Mendelson also is key to the situation, a supporter of Evans and his efforts to install monopolized legal sports betting. As the overseer of the schedule, Mendelson did everything he could procedurally do to garner the needed seven votes.
Seeing a potential swing candidate in the chamber, the chairman rearranged the calendar to push a bill from Councilmember Vincent Gray to the top. Gray was eager to point out that his proposal to reallocate the revenue from DC sports betting had nothing to do with any specific operator and urged adoption.
Despite his claims, it appeared that his vote on the contract hinged on his supposedly unrelated amendment.
The committee rejected Gray’s proposal, but he did not reject the Intralot contract. Although Gray ultimately cast the deciding vote as expected, it was a surprise yes to bring the tally to 7-5 in favor.
Anyone who’s spent any time watching the nascent US sports betting market will understand the broad effects of competition, both for bettors and for the industry as a whole.
Look no farther than New Jersey, where a competitive framework has facilitated more than $3 billion in total wagers through the first year of operation. Even rivals DraftKings Sportsbook and FanDuel Sportsbook wrote an op-ed in the Washington Post urging DC lawmakers to open up the market.
In the end, though, a desire to beat to market sports betting ghosts in Virginia and Maryland clouded the logic of enough city officials to land Intralot the gig in the nation’s capital.
What lawmakers have authorized — whether they realize it or not — is a fixed-payout sports lottery product that won’t look anything like traditional sports betting. And it’s a huge underdog to meet revenue projections.
Intralot’s proud but flawed claim that it will hold as much as 30% of all wagers was no doubt a key factor in securing the contract.