A member of Congress raised objections to the District’s plan to award a sole source contract to run the city’s new and potentially lucrative venture into online sports gambling. But after his concerns were made public Friday, the District’s representative in Congress said she persuaded him to drop the matter.
Rep. William Lacy Clay (D-Mo.) sent a letter Thursday to D.C. Chief Financial Officer Jeffrey S. DeWitt asking about the city’s decision to forgo competitive bidding and award the contract on a fast-track basis to Intralot, even after the Greek gaming company was downgraded by financial ratings agencies.
“With Intralot’s failure to keep its own finances in order, I am again curious as to why would you advocate paying millions of dollars of the District’s residents to this Company for its services and trusting it to generate millions more for the District treasury through a sole source lottery and sports wagering contract,” wrote Clay, who sits on the House Oversight Committee with jurisdiction over District affairs.
DeWitt oversees the D.C. Lottery, which is set to regulate sports betting when it launches later this year. Intralot already holds the contract for administering the city lottery.
David Umansky, DeWitt’s spokesman, said the office would send a detailed response to the congressman within 10 days.
Shortly after the Post posted a story online Friday about Clay’s letter, Del. Eleanor Holmes Norton (D-D.C.), who champions D.C. home rule in Congress, tweeted that she spoke to Clay and that he “is not pursuing the inquiry.” An aide to Norton says she believes the congressman is no longer seeking a response from the city.
A spokesman for Clay could not immediately confirm Norton’s account and declined to explain the congressman’s interest in a D.C. contracting issue.
The letter asked when city officials became aware that credit ratings agencies downgraded Intralot and how they informed the D.C. Council, which gave final approval this week to the deal.
“I am extremely curious and seeking answers as to how this sole source contract is in the best interest of the District and its citizens,” Clay wrote. “Rather, the action appears to assist a large international company that is facing some obvious financial difficulties.”
Earlier this month, D.C. Lottery Executive Director Beth Bresnahan told lawmakers she was not worried about Intralot’s finances and said 2018 was a “transition year” for the company as it spent heavily to grow in U.S. and European markets.
“Based on our ongoing analysis of Intralot, we are not concerned about their viability, consistent with several other government entities that have recently signed new contracts or entered into contract extensions with the company,” Bresnahan wrote in a Feb. 11 letter.
She shared a letter from Intralot CEO Antonios Kerastaris, who described the credit downgrades as “fully anticipated” and said the District contract would not present a financial or operational challenge of any kind.
The issue of Intralot’s financial ratings did not appear to change any D.C. Council votes, but council member David Grosso (I-At Large) cited it as another reason to oppose legalized gambling.
“We consistently hear from the chief financial officer about the importance of bond ratings,” Grosso said before Tuesday’s final vote on the sports betting contracting legislation. “However, we’re essentially being asked to just ignore this downgrade of Intralot and reward a company that does not comport with the values that have been espoused by our own chief financial officer and declare this emergency.”
D.C. Council Chairman Phil Mendelson (D) defended the sole-source contract on Friday. “There’s lot of controversy in here, but a lot of that controversy is ginned up by the competitors who want a chance in the market,” he said on WAMU’s “Kojo Nnamdi Show.”
Council member Jack Evans (D-Ward 2) and lottery officials said the District needed to move fast to become a regional leader before Maryland and Virginia could launch sports betting .
Officials say they hope to have sports betting in place before the start of the National Football League season this fall. Gamblers will be able to place bets on phones and at arenas, at restaurants or other businesses that pay for sports betting machines.