The District of Columbia’s sports betting plans are temporarily on hold after a court issued a restraining order against the local government.
On Thursday, DC Superior Court Judge Joan Zeldon granted a local citizen’s request to pause a controversial five-year, $215m, no-bid contract the DC Council awarded to DC Lottery technology provider Intralot to launch a mobile sports betting product. The contract’s first $30m installment was to be paid on October 1 but that payment is now on hold.
The contract was challenged in court by DC resident Dylan Carragher, a software developer who designed his own mobile sports betting app and had hoped to bid on the DC Lottery betting contract.
Carragher’s suit was based on his view that the District’s Home Rule Act required a competitive bidding process before doling out the financial goodies. The District’s betting legislation offered Intralot an exemption to this requirement, the latest in a long string of questionable benefits that DC has bestowed upon the Greek company over the years.
Judge Zeldon said there was a “substantial likelihood” of Carragher succeeding in demonstrating that the DC Council was treating the Home Rule Act like a roll of toilet paper (we’re paraphrasing). The restraining order Zeldon issued Thursday is good for two weeks and a hearing has been scheduled for October 1 to consider Carragher’s motion for a preliminary injunction.
Several Council members rushed out statements celebrating Zeldon’s ruling, with Mary Cheh slamming the “shoddy and unscrupulous circumstances that led to this contract.” Councilman David Grosso called the whole episode “a boondoggle from the very beginning.”
The DC Council’s Intralot giveaway came under further criticism in August when the company’s local partner Veterans Services Corp (VSC) was exposed as a shell company with no actual employees that was run by a Maryland-based employee of an Intralot subsidiary. Questions were also raised as to Intralot’s financial situation following the loss of a major lottery contract in Turkey and its capacity to carry on as a going concern.
Intralot was supposed to have its mobile betting product up and running by January 2020 but this timeline is now in serious doubt. Moreover, Intralot’s existing contract expires on September 30, so the legal tangle could end up impacting the company’s existing DC Lottery operations.
DC’s betting legislation offered the Intralot/DC Lottery combo a virtual monopoly on digital wagering but also authorized land-based wagers at local bars and sports venues, as well as limited mobile wagering within a two-block radius of each venue. It’s unclear what impact, if any, the current legal kerfuffle might have on the rollout of those retail operations but any delay in the DC Lottery getting its digital ops up and running could possibly give the venues’ mobile ops a fighting chance at establishing customer relationships.
