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Although the Washington D.C. City Council faced a tremendous backlash from watchdogs and the public, the group approved a divisive contract with betting company Intralot.
By a narrow 7-5 vote, the council passed the proposed arrangement with the hopes that sports betting could continue on its accelerated path to the opening in the district by year’s end.
The deal is for five years and $215 million assuring that Intralot will handle the city’s lottery system and create a sports betting app that will function only inside the boundaries of the district.
The move to approve the contract comes as a surprise as the proposal looked to be dead earlier that day with an overall lack of support for the agreement.
Many of the opposing city council members believed that the deal was nothing more than a bailout for a struggling company that might not be solvent by the end of the deal.
Others on the board expressed concern that the contract was essentially a no-bid arrangement that did not allow outside bids to influence the final decision.
Also, board member Tony Evans was accused of lobbying influences by persons attached to the Intralot company.
Ultimately, the concerns were pushed aside as the vote was driven by the possibility of lost tax revenue to the city if the bidding process dragged on for 18-24 months, a timeline some members believed was likely.
Spearheading the fear of a long wait for tax revenue was the Chairman, Phil Mendelson, who pushed members to vote the contract through to avoid missing out on millions of dollars
“There will be a protest [of the contract], a lot of controversies, a lot of dispute and a lot of delays,” Mendelson said in session. “And there is a significant cost to a delay of a couple of years.”
Mendelson warned the council that the city would stand to lose close to $17 million in estimated tax revenue over the next fiscal year.
“I can assure you there will be more contractors and more allegations of favoritism toward cronies. It will be inescapable. If you’re uncomfortable now, [you] will be far more uncomfortable then,” Mendelson said.
Some council members felt the argument that the district would miss out on millions of revenue was a farce and no reason to push the no-bid contract through.
Another point by Cheh was that, like most early-adopting states, the estimated revenue figures were continuing to fall, making sports betting a less urgent matter.
Early figures had D.C. pulling in over $35 million in bets in the first year but that has fallen to $20 million in recent months.
Despite the blowback, the contract was passed and a timeline was set for the start of sports betting in D.C.
Although Intralot will not have their mobile app ready until early 2020, the district should have sports betting ready to go at stadiums and arenas later this fall.
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