After years of controversy, D.C.'s lottery operator wants "fresh start"
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After over 15 years of on-and-off controversies, most famously involving a botched sports gambling app, D.C.'s lottery contractor is severing ties with a local businessman and announcing a new partnership.
Why it matters: The contractor, Bally's Intralot, said it wants a "fresh start" as it pursues renewal of a $10.5 million annual contract.
Zoom in: It's doing so by asking D.C. regulators to drop a small firm called Veterans Services Corporation, founded by Maryland banker-turned-lottery operator Emmanuel Bailey.
- Intralot got acquainted with Bailey in 2009, when D.C. officials all but required the Greece-based company to bring on a small business into what was a lucrative contract. The idea was to spur local jobs.
- But Bailey drew episodic scrutiny over the size of his company (no employees, the Washington Post found in 2019) and his paycheck (at least $1.4 million annually, as Axios found two years ago).
- After a glitchy rollout of D.C.'s sports gambling app, Attorney General Brian Schwalb accused VSC and Intralot of fraud, allegations that both companies denied but paid $6.5 million to settle last year.
Between the lines: Intralot tried sidelining Bailey several years ago, as Axios previously uncovered, but D.C. regulators sided with Bailey, citing revenue-sharing commitments it made to VSC.
- Reached on the phone, Bailey declined comment to Axios. VSC recently expanded its business with Maryland's lottery.
State of play: Intralot, which merged with Bally's Corporation last year, still needs D.C. officials to sign off on the change.
- A spokesperson for D.C.'s chief financial officer told Axios the modification is pending approval from the Department of Small and Local Business Development, which did not comment.
Bally's Intralot's new partner would be Dynamic Concepts, Inc.
- The D.C.-based company provides utility, IT and infrastructure services, per its website, and was co-founded in 1979 by Pedro Alfonso.
- "This is a fresh start for Bally's Intralot in Washington, D.C.," interim CEO Richard Wheeler said in a statement.
What's ahead: Intralot wants D.C. to approve a one-year extension of its lottery contract, expiring on July 15.
Editor's note: This story has been updated to add comment from a spokesperson for D.C.'s chief financial officer.