D.C. Council challenges plans for rolling out virtual casino

June 29, 2011

Plans for rolling out a virtual casino in the District could be shaken up after council members sharply questioned D.C. Lottery officials Wednesday during a belated hearing about the first-in-the-nation effort.

“It has raised a whole lot more questions for me than answers,” D.C. Council member Tommy Wells (D-Ward 6) told officials implementing the online gambling initiative.

Many of the most pointed inquiries centered on which public settings and commercial establishments could become gathering places for online poker, blackjack and bingo.

D.C. Lottery officials had said in recent days that they would rely on a network of hundreds of WiFi hot spots in government buildings and commercial establishments to launch online betting across the city in September. But in response to calls Wednesday for a possible delay, lottery officials reversed course, saying they might focus first on allowing that betting in private homes.

A key question — whether the District’s law allowing online betting violates federal gambling restrictions — remains unanswered. D.C. Attorney General Irvin B. Nathan testified that the city’s efforts are legal, so long as the technology being put in place ensures that all gambling activities stay within city limits. Federal law restricts interstate financial transactions related to gambling.

Council members said they were reassured by Nathan’s position.

Nathan said the District had submitted the new law and the city’s plans for implementing it to the Justice Department, which enforces federal anti-gambling laws. Nathan said the agency has yet to respond to the city. “Obviously, we’d be interested in their views. They have the matter under advisement,” Nathan said. A Justice Department spokeswoman declined to comment on the D.C. law.

Council member Jack Evans (D-Ward 2), finance committee chairman, convened Wednesday’s hearing six months after the council passed the online gambling legislation without the typical public vetting process.

Member Michael A. Brown (I-At-Large), whose role in pushing the legislation has come under scrutiny, repeated his assertion that the expedited process reflected his urgency to find revenue for the needy and to protect growing numbers of online gamblers.

Evans said he still did not understand why the gambling proposal was not introduced on its own. The measure was part a budget amendment and received little attention.

The hearing did bring additional clarity to some of the government and gambling lingo city officials included in plans made available for public comment. One document, for example, made reference to “random number generated games,” yet attracted little attention. But in a revealing exchange with Wells, the executive director of the D.C. Lottery said that the city will allow what amount to virtual slots.

“Do you expect to be offering slot machines?” Wells asked.

“Yes,” responded Buddy Roogow, lottery chief. But a moment later, Roogow added: “They do not meet the legal definition of slot machines. They are, in fact, random-number-generated machines.”

Later, Wells said: “It is essentially online slot machines. [Roogow’s] attorney told him he had to make a distinction. I was very aware of that interaction.”

Several years ago, the District went through a heated public debate over whether to allow video slots; video slots were not adopted. But the slotslike game wrapped into this new initiative had no such scrutiny, Wells said.

The District plans to call its gambling site iGamingDC.com. The question of where to allow people to access the site spurred the most fervent debate at Wednesday’s hearing.

Evans and other council members challenged lottery officials about whether their target date for launch, Sept. 8, would allow residents and neighborhood leaders enough time to weigh in about specific locations, which have yet to be announced. Some also questioned the appropriateness of using some locations — such as libraries, strip clubs or senior care facilities — as access points for online betting.

Given the council’s feedback, concentrating on household betting first “is possibly an easier area to get started with,” Roogow said. By doing that, “some of their concerns, it sounds like, would go away. . . . We’ve got to do it so everybody’s comfortable.”

But the plans remain in flux, officials said. That’s in part because technical questions remain. Concentrating on government and commercial WiFi spots made sense for architects of the gambling effort because they help solve another problem: making sure the bettors are in the District.

It could take more time to verify that people in individual homes are indeed signing up at District addresses, which could mean that not everyone interested in getting up and betting immediately will be able to, officials said.

There’s another issue: A significant share of hoped-for revenue, the key justification for allowing online gambling, is supposed to come from people who live in Maryland and Virginia and tourists visiting from across the country. “Do you want them to be able to come to your house so they can play?” Roogow asked, noting that those people are a key part of the “revenue structure.”

Not everyone was skeptical of the gambling effort. Member Marion Barry (D-Ward 8) said he grew up in a conservative swath of the South. “If the Bible Belt people, Bible-toting Christians, can support some form of gambling, we ought to do that here,” Barry said.

Mike Laris came to Post by way of Los Angeles and Beijing. He’s written about the world’s greatest holstein bull, earth’s biggest pork producer, home builders, the homeless, steel workers and Italian tumors.
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