Intralot's Betting and Lottery Contract in DC Facing Investigation
The District of Columbia's attorney general's office is conducting an investigation into the city's lottery and sports betting contract, according to individuals familiar with the situation. The probe, according to Axios, centers on the contract awarded to the Greek lottery and gaming company Intralot in 2019, which faced significant criticism for underperformance and was later supplanted by third-party operators such as FanDuel.
A GamebetDC betting kiosk in a Washington, DC. restaurant. (Source: The Washington Post)
LISTEN TO THIS ARTICLE:The investigation reportedly began during the summer of 2023 when the attorney general's office requested information related to the contract from Intralot. The specifics of the investigation remain unclear, including whether the focus is on Intralot itself or one of its subcontractors in the District. The office of Attorney General Brian Schwalb, which has the authority to bring civil cases, has not disclosed whether the investigation could lead to legal action.
Related: Betting Operators Support Bill Expanding the Sports Wagering Market of Washington, DCThe contract in question was awarded without a competitive bidding process and was valued at $215 million. It granted Intralot the responsibility of developing and managing GambetDC, the District's first sports betting platform.
GambetDC, however, failed to meet revenue expectations and received widespread criticism from users for technical issues and limited features. In April of this year, the District replaced GambetDC with FanDuel, which demonstrated immediate success by generating more revenue in its first month than GambetDC had in an entire year.
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The contract also required Intralot to collaborate with a local firm, leading to a subcontracting agreement with Veterans Services Corp. This D.C.-based company, operated by Maryland businessman Emmanuel Bailey, has remained a subcontractor on the contract despite GambetDC's performance issues.
Financial records reveal that Intralot paid at least $1.4 million annually to Bailey's company. In July, a contract extension worth nearly $39 million allocated $19.8 million to Veterans Services Corp., which continues to act as the operations manager for the District's lottery and sports betting contract.
Documents from the contract extension specify that Intralot is no longer required to manage retail, mobile, or Internet sports wagering in the District. This change follows the city's decision to open its sports betting market to third-party operators. Despite its reduced role, Intralot's ongoing partnership with Veterans Services Corp. has raised questions about the allocation of funds and the management of the contract.
Broader scrutiny of the city's contracting practices has added context to the investigation. Allegations of bribery involving council member Trayon White and the guilty plea of contractor Allieu Kamara for fraud and bribery have heightened concerns over transparency and accountability in DC contracts. Kamara's firm, which was implicated in the lottery contract, was cut from the agreement earlier this month following media reports.
FanDuel's early success in the District contrasts sharply with the performance of GambetDC. In its first week, FanDuel's app processed $6 million in bets, significantly outpacing GambetDC's monthly average. The profitability of FanDuel's platform has highlighted the shortcomings of the initial contract awarded to Intralot and added to the ongoing criticism of the earlier arrangement.
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