D.C. Judge Suspends City's No-Bid Gambling Contract
A D.C. Superior Court judge has extended a previous suspension order that stopped the city from paying the company they awarded a recent no-bid contract to run the district’s sports betting.
The judge is waiting to hear arguments on a lawsuit filed by local software developer, Dylan Carragher, who is claiming that the $215 million dollar contract with Intralot to provide sports betting for the city is illegal because the district’s council did not open the bidding to other businesses.
Superior Court Judge John Campbell extended the restraining order until October 18th, telling the parties that he hoped to decide on the lawsuit by that date, preventing a long and drawn-out legal process.
“It seems to me that we might as well just grapple with the issue,” Campbell said. “The merits are what they are. The legal argument is fairly straightforward.”
Although Judge Campbell prevented Intralot from receiving payment for their sports betting operation, they are allowed to continue offering the lottery to residents, a service they’ve provided for the past decade.
Intralot’s no-bid win took place over the summer after a controversial debate over the legality and possible corruption by the company toward council members.
In Carragher’s lawsuit, he argues that the city is violating the Home Rule Act, a law that requires the District’s chief financial officer to follow a set of guidelines under District procurement law.
The lawsuit further argues that the council could not make a decision that District law states that the chief financial officer must make.
In the legal brief, Carragher claims that his app development business was not allowed to compete against Intralot for the contract. He also claims that the no-bid contract violated the ability of taxpayers to secure the best and most affordable deal for the District.
Carragher’s claims have caught the eye of executives at FanDuel and DraftKings who share the developer’s legal argument, claiming that Intralot’s monopoly on the sports betting operation is preventing the District from making the most money possible.
Why Are the City’s Lawyers Arguing to Keep the Deal in Place?
In a brief filed with Judge Campbell, D.C. Attorney General, Karl A. Racine, believed that Carragher’s claim that the Home Rule Act has been violated is not a proper interpretation of the law.
Racine argues in the brief that the council can amend District procurement law, exempting the group from forcing the sports betting contract to adhere to local law.
“In the Home Rule Act, Congress stated that the CFO must follow the procurement law established by the Council, but nothing prevents the Council from amending or creating exemptions to that procurement law,” the District’s brief read.
“Ultimately, there is no indication that Congress intended to constrain the Council’s authority to legislate with respect to one category of procurements — those involving” the chief financial officer.”
The District’ chief financial officer, Jeffrey DeWitt, also stated to the court that by awarding Intralot the contract that the District was allowed to fast track sports betting ahead of neighboring states such as Maryland and Virginia.
If Judge Campbell rules for an open bidding process, the District will delay their intended launch date of sports betting in January to accommodate the search.