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Posted at 06:00 PM ET, 02/01/2012

What will iGaming repeal cost the District?


Buddy Roogow gives a presentation on “iGaming” in October. (Mike DeBonis - The Washington Post)
Now that it looks at though the District’s Internet gambling program is headed for (at least temporary) oblivion, it’s worth contemplating what that move will cost taxpayers.

On one level, it will cost the city about $13.1 million, which is how much revenue finance officials have estimated the program would bring in through September 2015.

That revenue has already been used to balance the city’s four-year financial plan. (Unlike pretty much every other government, Congress says the District has to balance its spending not just in the current fiscal year, but three years into the future.) So lawmakers have to identify $13.1 million in new revenue or spending cuts to account for the disappearance of “iGaming.” It’s not a lot in the context of a $6 billion-a-year local budget, but it’s not nothing. D.C. Council sources say they’re still working to find the money, so consider that a minor complication as the repeal moves forward.

In terms of costs incurred, city taxpayers have yet to spend a dime on developing the program, but its lottery contractor, Intralot, has spent more than $5 million preparing an iGaming system. The unsettling prospect is that Intralot might sue the District after spending that kind of money only to see authorization for the program evaporate.

As D.C. Lottery executive director Buddy Roogow put it today, ”Obviously, they’re not happy.”

David Umansky, a spokesman for Chief Financial Officer Natwar M. Gandhi, said the District hasn’t yet executed the lottery contract option for Internet gambling, so the city has no legal exposure whatsoever.

Byron Boothe, an Intralot executive, said Tuesday would not comment on the prospect of litigation. But he did challenge the notion that the iGaming option hasn’t been officially executed, calling it a “matter of interpretation.” Under the lottery contract, he noted, Intralot must have a system ready to go very soon after the District decides to exercise the option, so the company has been working closely at the D.C. Lottery’s direction to get things going. Reading between the lines, there might be enough there for a well-paid team of attorneys to find grounds for Intralot to recover at least some of its costs.

It other words, if the iGaming program is deauthorized, this could get messy — and expensive.

By  |  06:00 PM ET, 02/01/2012

 
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