DC Council Files $6.5 Million Lawsuit Against Former GameBetDC Operator

It appears that Intralot will finally have to answer to their failure with GameBetDC. 

The DC City Council has filed a lawsuit against Intralot for $6.5 million. The suit alleges that Intralot and its subcontractor, Veteran Services Corporation (VSC), entered into an illegal deal to cut local businesses out of the revenue from sports betting. 

When Intralot was awarded the sole contract to run the District’s sports betting market, it assured the Council it had deals with local businesses. However, the operator entered into a secret agreement with VSC to exclude those businesses, which violated the District’s False Claims Act and led to the lawsuit.

“This is a warning to any company that tries to manipulate and exploit District contracting laws, especially laws intended to build the capacity of the local businesses vital to our economy,” said DC Attorney General Brian Schwalb. “Intralot and VSC’s sports betting deal was a sham from the start—an elaborate scheme to secure a lucrative, high-profile opportunity on a sole-source basis while circumventing the District’s small business contracting laws.”

If the lawsuit is successful, Intralot will be required to pay $5 million, and VSC will cover the remaining $1.5 million.

GameBetDC’s Failure Led to Investigation

It's possible that Intralot and VSC could have gotten away with the backroom deal if GameBetDC had not failed so spectacularly. Not only was it an embarrassment for the District, but it also led to tax revenue numbers falling well below projections.

The online sportsbook had issues with bugs and was clunky to use, leading to bettors opting to place wagers in neighboring states. That led to a lot of revenue being lost while still bringing the dangers of legal gambling.

The failure of GameBetDC led to the District replacing them and expanding the sports betting industry. The district also initiated an investigation, which started when it demanded documentation from VSC. This uncovered the secret deal, which led to the current lawsuit.