jonetta rose barras: DC inches closer to sports betting
The majority of DC Council members renewed their commitment this week to the goal of making the District the first jurisdiction in the region to offer online sports betting. In a 7-6 vote, lawmakers on Tuesday approved the Sports Wagering Procurement Practices Reform Exemption Act of 2019, which authorizes Chief Financial Officer Jeffrey DeWitt and DC Office of Lottery and Gaming director Beth Bresnahan to negotiate a sole-source contract with Intralot.
CFO spokesperson David Umansky said neither DeWitt nor Bresnahan would comment about the council’s initial approval. The legislation still must go through a second vote. The council may want to expedite the contract negotiation process by approving the bill on an emergency basis, as the CFO had sought initially.
Intralot, with local partner DC09, has been the city’s lottery vendor for the past decade, providing equipment and personnel for as many as 400 sites. While some observers have questioned the sports wagering bona fides of the Greece-based company, Intralot has asserted its experience with “integrated gaming transaction, processing system, game content, sports betting management and interactive gambling services.”
The contract is expected to require Intralot to refresh DC’s lottery, to include digitizing the games and perhaps creating new ones. It would also require creation of a sports wagering system that could include betting parlors across the city and online gambling through mobile apps. DeWitt indicated during the public hearing held on Jan. 28 that negotiations for the new contract could take 60 days.
However, Umansky told me in an email response to several questions that it would be “premature to estimate the negotiation time and costs prior to authorization to negotiate a contract. The current lottery-only contract cost is based on a percentage of sales, amounting to approximately $7 million annually.”
DeWitt has made the conservative projection that if the sports wagering system gets up and running by September, the city could bring in $8 million in 2019; about $6 million of that would come from the betting associated with the lottery operation, which would have a monopoly on mobile apps — except those inside sports-league facilities like Nationals Park, Capital One Arena and Audi Field.
If you’re wondering just how much money might be involved, consider this: The estimated betting for the recent Super Bowl was $325 million, according to PlayUSA. In 2018, Nevada’s sports betting books took in nearly $159 million for the Super Bowl alone. If things proceed smoothly, the District betting could be included in similar totals.
There is little guarantee, however, that there won’t be huge potholes in the process. Several companies and individuals that fantasized years ago of being major players in the local gambling industry, including former at-large Council member John Ray, seem to have stormed the John A. Wilson Building in recent months. They have sought to put pressure on council members, including Ward 5’s Kenyan McDuffie, to vote against the legislation, asserting that small, local and minority business owners would not benefit under the proposed setup.
That’s a red herring.
DC09, Intralot’s local partner, is owned and operated by Emmanuel Bailey, an African-American. At least 37 percent of the subcontractors with Intralot/DC09 are small, local minority businesses. (Full disclosure: Bailey has provided a small grant to my nonprofit for the past three years — not through his lottery company. However, he and Intralot have helped a variety of groups including the Boys & Girls Clubs of Greater Washington, Unity Health Care, Washington Tennis & Education Foundation, N Street Village, DC College Access Program and Knock Out Abuse Against Women, among others.)
Why would McDuffie and at-large Council member Robert White want to push out one minority business owner — who, according to the CFO, has performed well — for another group whose principals have never run a lottery or sports wagering operation in their careers? I wish I knew the answer to that question. Neither White nor McDuffie responded to my request for comment after Tuesday’s vote.
Their opposition has seemed absurd to me, especially given the fact that the underlying legislation, already signed into law by Mayor Muriel Bowser, contains two provisions they sought, providing greater opportunity to minority businesses. As enacted, the law mandates that “all contracts, including contracts entered into by the [lottery] under the authority of the [act] shall be subject to the [Certified Business Enterprise] requirements of the CBE act.” Equally important, the law provides that any Class A or Class B license holder that “partners with a joint venture with a CBE majority interest” shall receive a substantial reduction in its application fee.
Still, between now and the second vote on the contracting bill, expect plenty of misrepresentations from some sole-source opponents about what minority businesses will or won’t get out of sports wagering. If those individuals fail to disrupt the process at the next intersection, they likely will wait until the negotiated contract comes to the council for approval. They could then seek to have legislators disapprove the agreement.
All of that mischief will be brought to us by people intent on sabotaging the District’s sports wagering effort with the hope that they or their clients can eventually cash in. It has nothing to do with you.
jonetta rose barras is a DC-based freelance writer and host of The Barras Report television show. She can be reached at thebarrasreport@gmail.com.
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