The District of Columbia’s haste to get into sports betting is a sickening spectacle.
D.C. Chief Financial Officer Jeffrey DeWitt, who oversees the D.C. Lottery, testified last week before the city council’s Finance and Revenue Committee on behalf of legislation that would award a sole-source contract to the international gaming contractor Intralot to operate the city’s new sports betting system. Intralot operates the city’s gaming system under a different contract with the DC Lottery.
DeWitt began by saying, “I’m just gonna tell ya, there’s nothing there. This is a business decision. We have no horse in this race other than — not to use a sports betting analogy; unfortunately I just did — we’re just recommending what’s best financially.” No horse? DeWitt rode into the hearing on the back of the DC Lottery, which wants to abandon the competitive bidding process in favor of Intralot.
And the CFO and DC Lottery are not the only ones with a stake in that horse. Intralot and its joint venture partner DC09, a locally based contractor, also have a lot riding on bypassing procurement rules. The contract under which Intralot operates the lottery’s gaming system is worth a lucrative $7 million annually. The DeWitt proposal would allow the DC Lottery to negotiate a new contract with Intralot based on a percentage of revenue generated by the sports betting system that the council approved in December. That would mean a ton of money.
There are others assisting Intralot. William Jarvis, a lobbyist whose clients include DC09, has long had ties to Jack Evans (D-Ward 2), the finance committee chairman who favors the sole-source bill. Evans told me last week that he and Jarvis “have been friends for over 30 years” but that they “are not currently nor have we ever had a business relationship.” Evans said, “It is my understanding that he represents DC09 and he has talked to me in behalf of DC09.” Evans steered the sole-source bill through his committee last week in time for consideration by the entire council on Tuesday.
Horses, whether on racetracks or in stalls, can stir up quite a smell. The push to evade the procurement process carries a whiff of something similar. Proponents of sole-source contracting are trying to steamroll the bill through the council using the argument that time is of the essence; that neighboring Maryland and Virginia are also warming to the idea of sports betting. If the District doesn’t get its system functioning first, sports betting revenue may get lost to surrounding states, they claim. (Before proceeding with this legislation, CFO and DC Lottery claims of projected revenue from sports betting — which supposedly will run into the millions — ought to be tested. The council should call in the D.C. auditor to take closer look at the numbers through an objective lense.) That claim is highly debatable. Maryland and Virginia are months away from even deciding if they will enter the sports betting arena. Even if the District gets there first, there’s no guarantee that, should Maryland and Virginia get their programs up and running, they won’t tap in the city’s customer base as well.
The only thing base in this sports betting gamble is the concocted scheme to throw out competitive bidding in favor of a contractor who has an inside track. The game shouldn’t be played on those terms. The DC Lottery and the Office of the Chief Financial Officer should be made to play by time-tested procurement rules. Council approval of this sole-source bill would be a travesty.