D.C. Council votes to repeal Internet gambling law

February 7, 2012

The D.C. Council voted Tuesday to repeal the city’s first-in-the-nation Internet gambling law, capping a year-long debate about whether city officials improperly slipped the concept past the public without proper vetting.

After supporters unsuccessfully mounted a last-minute effort to salvage the measure, the council voted 10 to 2 to end the city’s contract for iGaming and reverse the legislation that authorized the game.

Council members — battered by public concerns about transparency — said they will consider future legislation that would allow residents and visitors to bet money on online games of chance.

But Tuesday’s vote, which occurred months before the games were to start, means it will probably be years before the District and Congress agree to authorize Internet gambling in the District.

“I want to make sure we get the best deal for the city,” said council member Jack Evans (D-Ward 2), who sponsored the repeal effort. “I believe it should be set up so the city gets the best price and the best revenue.”

Council member Michael A. Brown (I-At large), the chief proponent of online gaming in the District, said the council’s decision means a loss of tens of millions of dollars in revenue and will criminalize city residents who turn to the Internet to gamble.

“It’s the residents who lose, including residents who play every day now and will be left unprotected,” Brown said.

The council’s action came on the same day that members unanimously agreed to impose a moratorium on adult entertainment in Northeast Washington, reviving a debate about where strip clubs should be located.

When Internet gambling was approved, supporters were optimistic that they had avoided a similar cultural divide, which torpedoed proposals to legalize slot machines in the District nearly a decade ago.

Internet gaming was quietly added to the city’s lottery contract more than three months after the contract passed a 2009 council vote; it was legalized as part of a 2010 spending bill. Congress, which gets to review all District laws, did not object.

But the new law became entangled in a broader controversy about how the council and Mayor Vincent C. Gray (D) managed the city’s lottery contract, driving gambling opponents to push for repeal.

In a report last month, city Inspector General Charles J. Willoughby concluded that Chief Financial Officer Natwar M. Gand­hi added Internet gambling to the lottery program without issuing a written notice that the contract requirements had changed and allowing another round of bids from interested companies.

The report also said Brown pursued Internet gambling even though he was working as a lobbyist at a law firm whose clients included members of the gaming industry.

Although Willoughby concluded that Brown did not violate any law, he questioned why the council member did not more broadly disclose the potential public conflict.

“The train crashed, and we need to regroup to slow this down,” said Marie Drissel, a political activist from Kalorama who led the opposition.

During Tuesday’s debate, several council members signaled they were not aware of what they were voting on when they approved the budget provision that authorized Internet gambling.

“They didn’t even use the word ‘Internet gambling,’ ” Tommy Wells (D-Ward 6) said. “They used the word ‘I-gambling.’ . . . We decided as a city that we didn’t want slots. . . . It has to go through a public process. This didn’t go through a public process, but it’s slots.”

But council member Marion Barry (D-Ward 8), who along with Brown voted against repeal, derided his colleagues who suggested that they did not know what Internet gambling was when the council approved it.

“What kind of legislature are you?” Barry asked. You’re “giving the public the impression you didn’t know what you voted for. This council already has a low approval rating . . . and you are telling me you didn’t know you voted on something?”

To try to salvage the law, Brown was willing to scrap the city’s contract for iGaming with Intra­lot while preserving the legislation that permits online gambling.

Brown said it’s unclear whether Congress would reauthorize Internet gambling. He has also raised concerns that “casino interests” are trying to federalize Internet gambling in the District.

The repeal, which Gray supports, will cost the city $13.1 million in revenue through September 2015, by some estimates. Brown said iGaming would have generated more than $100 million for the city over 15 years.

City officials are working to identify new revenue or spending cuts to account for the change, but there could be some ramifications to Tuesday’s vote.

Although city taxpayers have yet to spend a dime on developing the program, its lottery contractor, Intralot, has spent more than $5 million preparing an iGaming system. It’s possible the company could sue to recoup its costs.

Byron Boothe, a spokesman for Intralot, declined to comment on possible litigation but said the company was “disappointed in the council vote.” He said the company will work with the city to create “new state-of-the-art technology and city jobs.”

The vote on strip clubs also originated from residents’ concerns that they don’t have enough say over policies.

Council member Vincent B. Orange (D-At Large), the sponsor of the legislation, said four pending adult entertainment licenses and several planned medical marijuana cultivation centers slated near New York Avenue NE were becoming “a nightmare” for residents.

With Northeast one of the few areas of the city zoned to accommodate adult entertainment, the council’s decision could further hinder efforts to reopen businesses displaced by the construction of Nationals Park.

“They are immoral,” said Sandra Shedrick-Moens, who attended the meeting with dozens of her neighbors sporting “No More Strip Club” T-shirts.

Staff writer Mike DeBonis contributed to this report.

Tim Craig is The Post’s bureau chief in Pakistan. He has also covered conflicts in Iraq, Afghanistan and within the District of Columbia government.
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