D.C.'s sports gambling operator led failed attempt to reform contract
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A former executive of D.C.'s sports gambling operator tried to blow up the city's $215 million contract and sideline the firm overseeing its troubled app.
Why it matters: The GambetDC app has disappointed sports bettors and raised questions about who's benefiting from the underperforming venture.
The big picture: For over a year, Byron Boothe, Intralot's former U.S. CEO, waged a fruitless crusade to recoup millions of dollars his company had promised the small local firm responsible for GambetDC, according to letters he sent D.C. officials.
Boothe wanted:
- Bigger payouts for sports bettors that are more in line with popular private apps — a change that was eventually made.
- Less involvement from its local app subcontractor Veterans Services Corp. (VSC) in the deal, and in turn, lower payments to the firm, which is entitled to 51% of gaming revenue. (Intralot also pays VSC's owner a $1.4 million salary.)
- More power — to replace other subcontractors in the deal.
Yes, but: Boothe ran into a brick wall of District officials adamant about enforcing the original agreement.
- D.C. informed Intralot early this year it had failed to share nearly $5.4 million of revenue with local firms, with VSC owed the lion's share of the money.
- "Intralot's failure to achieve the subcontracting requirements shall result in fines and penalties," wrote DC Department of Small & Local Business Development director Kristi Whitfield in a Jan. 10 letter to a lawyer for Intralot.
Less than a month later, Intralot backed down, and a new CEO, Nikolaos Nikolakopoulos, took over.
- Nikolakopoulos retracted Boothe's requests.
Emmanuel Bailey, who runs VSC, declined to comment to Axios. Intralot and Boothe didn't return emails.
Context: Headquartered in Athens, Greece, Intralot picked VSC as its D.C.-based partner in 2009 to win the city's lottery contract.
- The partnership continued when the D.C. Council approved the no-bid $215 million sports gambling contract for Intralot in 2019.
- In fiscal 2022, the GambetDC app posted $2.7 million in revenue. D.C. had originally estimated $20 million in annual revenue.
The bottom line: The five-year deal expires next July, at which point D.C. lawmakers have a big decision: Extend it or do the difficult work of fixing the sports gambling mess.
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