D.C. attorney general investigating lottery and sports gambling contract
Add Axios as your preferred source to
see more of our stories on Google.
The probe comes during unfolding contracting scandals in D.C. government. Photo: Bonnie Jo Mount/The Washington Post via Getty Images
The D.C. attorney general's office is investigating the District's lottery and sports gambling contract, according to two sources with knowledge of the probe.
Why it matters: D.C. awarded the contract to Intralot in 2019 to build the city's first sports betting app, which was widely panned, failed to meet revenue projections for the District and was replaced this year by FanDuel and other third-party apps.
What we're hearing: Attorney General Brian Schwalb's office requested information related to the contract from Intralot back in summer 2023, one of the sources said. Both asked for anonymity because they weren't authorized to discuss the investigation.
Context: Schwalb's office can bring civil cases against companies. It's unclear if the probe is targeting Intralot or one of its D.C. subcontractors, or whether it will result in a lawsuit.
The big picture: The ongoing investigation comes amid an unfolding scandal over other city contracts. Council member Trayon White is fighting allegations of accepting bribes, while a District contractor, Allieu Kamara, pleaded guilty in August to fraud and bribing city officials.
- D.C. earlier this month cut Kamara's firm from the lottery contract after Axios reported it was still listed as a subcontractor.
What they're saying: Several emails to Intralot and its general counsel were not returned.
- The attorney general's office declined to comment.
Catch up fast: Intralot is a Greece-based lottery and gaming giant. It has run the District's traditional lottery since 2009 and added sports gambling to its portfolio in 2019, through a $215 million, no-bid contract narrowly approved by the D.C. Council.
- But the app it produced, GambetDC, never lived up to expectations. FanDuel replaced it in April and produced more in revenue for the District in its first month than GambetDC did in a year.
When it came to building the app, District officials required Intralot to partner with a local firm in 2019. Intralot subcontracted with Veterans Services Corp., a D.C.-based company run by Emmanuel Bailey, a Maryland businessman.
- As the app flopped over the years, tensions grew between Intralot and Bailey.
- Axios uncovered that Intralot paid at least $1.4 million annually to Bailey.
The latest: Bailey's firm is still a subcontractor to Intralot.
- VSC will receive $19.8 million of a nearly $39 million contract extension that was approved in July, according to documents newly obtained by Axios. Although the contract extension requires Intralot to continue providing lottery services, it states that Intralot is "not required to operate or offer any retail, mobile and internet sports wagering in the District," after the city opened its marketplace to third-party apps.
- Bailey's firm, which also goes by the name Vital Services Contractors, will "serve as" the "Operations Manager for the Lottery & Sports Betting contract," the subcontracting document says.
Behind the scenes: After four years of overseeing the flawed GambetDC app, Bailey was impressed by FanDuel's immediate profitability.
- In April, a FanDuel director sent D.C. officials and Bailey a performance recap, according to emails acquired through a FOIA request. The FanDuel app took $6 million in bets in its first seven days — more than GambetDC averaged in a month.
- Bailey replied: "I have but one word, 'wow'."