The District of Columbia is one area of the United States that has been considering the legalization of sports betting. Over six months ago, legislation was passed allowing the activity and now a contract has been signed with an operator. This week, the members of the local Council approved a sole-source contract with no bids with Intralot, covering the lottery as well as sports betting operations. The deal takes place despite corruption allegations involving the sponsor of the sports betting legislation.
Multi-Million Dollar Deal
The deal with Intralot cost $215 million and will see the company provide a solution to D.C. for lottery gaming and sports betting. Stakeholders and industry insiders were argumentative with the deal and it soon came to light that the sponsor of the bill might have been involved in corruption with the tech company.
During the recent hearing involving the deal, the public learned more about an investigation involving Councilmember Jack Evans. The Ward 2 representative is the main person behind the sports betting industry coming to fruition in the region, he also has major connections to the Intralot company. Business dealings connected to Evans in the gambling industry as well as other sectors have been under fire as of late and even subject to and FBI raid.
With the investigation ongoing, moves were made to see the Intralot deal moved forward. The Council completed a vote and decided 7 to 5 to approve the deal. Now, it seems that D.C. sports betting could be at risk due to no competition.
Competitive is Important
As the no-bid contract with Intralot was being considered, sports betting operators tried to reason with the Council and tell them just how important an open market is. Both FanDuel and DraftKings gave their opinion on the matter, writing an opinion piece in the Washington Post trying to get lawmakers to understand the need for competition.
The efforts failed as officials in the city just want to get started quickly in the hopes of beating Maryland and Virginia in launching services. The region will now be offering a fixed-payout sports style lottery which will not take place like traditional sports betting. This will make it difficult for D.C. to be able to meet the projected revenues.
During the vote, Chairman Phil Mendelson urged members to approve the contract. He stated that as much as $17 million could be missed out in estimated revenues for the next fiscal year if the deal was not approved. He pushed the point that if a bidding process were to take place, it would take years to get started.
Sports Betting in D.C.
With the launch of sports betting via Intralot, players who live in D.C. will be able to place bets at arenas as well as other locations. An app will be launched by Intralot that will be accessible by visitors and residents of the area. Land-based wagering should be ready this year while the online option will not launch until 2020.
It will be interesting to see how well the industry does once launched. This year, we will be able to compare land based revenues and once an online option is live, we will have a better idea as to how well the industry is working for the region. Will the new industry be able to meet projected revenues via Intralot or will they fall behind due to the way the industry is being operated?