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$215 million D.C. sports gambling contract includes politically connected subcontractors

The nation’s capital is gearing up to be the next place with legal sports betting, but the contracting has come under scrutiny. (Wayne Parry/AP)

D.C. officials this week proposed a $215 million sole-source contract to manage online sports gambling and the lottery, a deal that would benefit several politically connected individuals as well as executives of a company that the city ousted from running a homeless shelter.

The D.C. Council and Mayor Muriel E. Bowser (D) authorized city officials to suspend procurement rules while awarding a lucrative contract to the Greek gaming company Intralot. They said it was necessary to launch a sports-betting mobile app quickly to maximize tax revenue.

D.C. Chief Financial Officer Jeffrey S. DeWitt, whose office regulates sports gambling, on Monday sent a proposed five-year contract to the council after months of negotiation with Intralot.

A summary of the proposed deal identifies seven companies that would serve as subcontractors, sharing more than a third of the $215 million contract that extends Intralot’s hold on the city lottery and gives it control over online sports gambling.

Emmanuel Bailey would continue as a subcontractor for Intralot on the sports gambling contract as he did for the D.C. lottery contract. The lottery contract was embroiled in controversy earlier in the decade, although investigators ultimately concluded there was no ethical or legal wrongdoing.

The law firm that Bailey hired to lobby the D.C. Council for sports gambling legislation, Goldblatt, Martin and Pozen, is also listed as a subcontractor.

A third proposed subcontractor, District Services Management, is run by executives who operated Life Deeds, which recently lost city contracts to care for some of the city’s most vulnerable.

Life Deeds was ousted from managing a homeless shelter in Ward 7 over allegations of falsified personnel records. The D.C. Department of Human Services also suspended Life Deeds’ contract to manage the cases of 24 people living in subsidized housing.

Allieu Kamara, the president of Life Deeds who is also listed as a contact for District Services Management, blamed a vendor for the falsified records and previously said he planned to appeal the agency’s decision. He did not return requests for comment Tuesday on his involvement in the Intralot contract.

Other sports gambling subcontractors have been involved in D.C. politics.

Public relations specialist Everett Hamilton, who managed communications for Bowser’s first mayoral run and for D.C. Council member Brandon T. Todd (D-Ward 4) in 2016, is a subcontractor through his firm, Octane.

Hamilton referred questions to an Intralot spokeswoman, who did not return an email seeking comment.

Another person involved in the contract comes from the city agency responsible for regulating sports gambling. Mark Jones, who served as a deputy director of the D.C. Lottery in the late 1990s and represented Ward 5 on the D.C. state board of education until this year, is continuing as a subcontractor through his firm M. Jones Companies. Jones was listed as a subcontractor for Intralot when it was awarded the lottery contract. He did not return a message left at his office.

The District’s sports gambling legislation gives the city exclusive rights to manage mobile sports betting, which is expected to be viewed as the most popular way to place a wager. The law also permits sportsbooks at arenas and betting machines at retailers similar to lottery terminals.

D.C. leaders have been trying to establish the city as the go-to location for sports betting in the Washington region. Bills to legalize sports betting in Maryland and Virginia did not advance in the most recent legislative sessions, and the closest states where betting is legal are West Virginia and Delaware.

The council has until July 25 to approve the sports betting contract under the standard 45-day contract review period. Lottery officials have said it would take six months after the contract’s approval to launch the mobile sports-betting app, but wagers at private establishments could start as early as September.

Critics have said that the city should award the sports-betting contract through competitive bidding, saying that multiple bids result in the best deal for taxpayers and limits cronyism in contracting. They also have raised questions about the financial health of Intralot after credit-rating agencies downgraded the company’s ratings.

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