Analysis: Will GambetDC Super Bowl Disaster Finally Lead To Changes?

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It appears that GambetDC has never been more in shambles than it is right now.

That is really saying something about the DC Lottery‘s Intralot-powered sportsbook, considering the oft-troubled operation has never been on firm footing. There have been a number of failings recently, though, that might actually lead to some changes.

Anyone interested in DC sports betting should listen to the Performance Oversight Hearing held by DC Councilmember Kenyan McDuffie. Here’s a recap of the pertinent points.

Intralot to blame for GambetDC Super Bowl outage

The biggest problem GambetDC has faced to date came on Super Bowl Sunday when its Apple app was unavailable for users.

That is because the app’s SSL certificate expired in January. The Office of Lottery and Gaming provided everything Intralot needed by Jan. 6 for the update.

Intralot, however, did not push that update until Feb. 10. The update included more than it needed to at that time, including software updates, and led to a rejection, OLG Executive Director Frank Suarez said.

Stunner: Intralot will have to pay for failure

Waiting too long and including unnecessary updates showed a lack of basic understanding of the process by Intralot, Suarez added. Suarez took his complaints to Intralot’s CEO in Greece and the two are negotiating a payment to account for missed business.

GambetDC has 30,000 registered users, Suarez said, though he admitted only about 6,000 are active on any standard week. About 60% of those users are on iOS devices, Suarez said.

That left GambetDC with a Super Bowl Sunday handle of just $309,000 across all sports. That came from retail bettors, Android app users, and betting on the desktop website.

As a comparison, the lowest reported handle on the Super Bowl is in Montana – another Intralot operation – with $695,838 bet.

Outage a ‘national embarrassment’

McDuffie called the Super Bowl outage a national embarrassment and made it clear this is an unacceptable error:

“You all state that Intralot did not understand the process required to deploy an updated mobile app for iOS, complicated the update by adding unrelated software enhancements, provided poor quality assurance, demonstrated bad decision-making, failed to mitigate harm, and misrepresented the situation to the Office of Lottery and Gaming. That is so deeply troubling on so many levels.”

McDuffie also asked what kind of assurances are in place that such a mistake will not happen before March Madness betting later this month.

Suarez told him Intralot already made a few changes. There is a new VP of operations, as well as a restructuring of the team from Intralot that serves the OLG, including adding an employee focused on just the sports betting business. Intralot also increased its quality assurance efforts to make sure bugs and defects are fixed sooner.

GambetDC estimates way down

Remember last time the OLG was brought in front of McDuffie to face the music for its floundering operations? Then, interim Executive Director Ridgley Bennet blamed the covid pandemic but showed confidence in the $20.4 million revenue estimate for fiscal 2022:

“What we believe will happen now that the city is opening up, now that sporting events are actually occurring, is that you’ll see how that model will bring in a significantly greater revenue to the district than what the privately-operated sports wagering will do.

“But once again we’ll have to see, but that’s how the program is designed and we are still confident in the model.”

About that …

That confidence is gone and those estimates were never possible to hit, Suarez said after trimming the revenue estimate for this fiscal year to $1.5 million. DC would need to increase its population by about 10 times to hit that kind of revenue figure, Suarez said.

Suarez said those estimates were based on the best information available at the time. The fiscal 2021 estimate of $6.2 million – which was originally $22.6 million – actually resulted in a $4 million loss for the District.

Meanwhile, estimates for private operators including BetMGM and Caesars Sportsbook increased. Suarez noted the OLG agreed to increase its payout rate to 90% from 80% right before the Super Bowl to better compete with private operators.

Finally time for a full market study?

Hearing how the estimates were totally wrong led McDuffie to an interesting point Suarez could not sidestep: if the information used to make these estimates and decisions on how DC sports betting operates was incorrect, maybe it is time for a study to see where the market actually stands.

Having the OLG operate its own sportsbook is simply a choice by the District. Private operators could have access to all of DC instead of just a two-block radius from their sports team partners if the sports betting tax were doubled to 20%.

“I would tell you that I’m always a proponent of more information,” Suarez said. “I always want to do the research, I want to do the analysis, I want to see the data – I believe the data is really important whenever you’re making these types of decisions.

“So I think a study is fine. If we feel like we want to analyze that and see if there’s a different type of model that could potentially work better. I think we just have to be clear on what the objectives are of the model and what we want it to achieve in the District.”

The last study on GambetDC from the Office of the DC Auditor showed the app is underperforming and offered a number of changes, most of which have gone unheeded.