DC Sports Betting: Lotto Reps Assumed Casual Bettors Would Be Okay With 80 Percent Payout

With the existing 5-year no-bid contract with Greek gaming firm Interlot expiring in July, Washington, D.C.'s Office of Lottery and Gaming (OLG) is finally seeking out a private operator to replace its underperforming GambetDC app.

D.C. Disaster

The incestuous relationship between the OLG, Interlot and its politically connected subcontractor VSC became somewhat clearer - or maybe murkier depending on how you want to look at things - back in June.

The D.C. regulators further assert the Greek company that won the District’s controversial $215 million sports betting contract back in 2019 continues to violate the terms of its deal with the city by not sending enough work to Emmanuel Bailey’s firm, Veterans Services Corporation (VSC), according to internal emails and letters recently released to Loose Lips via a Freedom of Information Act request, as reported by the Washington City Paper.

The dynamics of this relationship get a bit complicated so here is a little history:

Bailey's firm, Veterans Services Corp. or VSC, has been a lottery and gambling subcontractor for more than a decade. 

Veterans Services Corp. has played a central role in running the DC Lottery for the last 12 years as a subcontractor for the Greek company Intralot.

“Our partnership, as vendor to the DC Lottery, has returned over $500 million to the district,” Emmanuel Bailey, president and CEO of Veterans Services Corp., said in a statement.

Confused? 

You should be.

What is abundantly clear is that the platform has brought just a fraction of the $20 million in annual revenue that D.C.’s former chief financial officer forecast in 2019.

Instead of the projected $84 million sports betting in the nation's capital was supposed to generate, the app has brought in just over $4.3 million to date!

The Executive Summary of Interlot discusses the benefits of what it terms "high hold sports betting (typical hold rate of 20 to 30%) offered exclusively by the D.C. Lottery, is appealing on its face, as higher hold means more revenue per dollar wagered." 

Jessica Wellman of SBC noted how a "Lotto representative admitted they assumed casual bettors just wouldn't notice or care about an 80% payout and that proved to be very, very wrong."

She added:

"This is wild. The lotto is suggesting that, of all people, Intralot has picked a new subcontractor as opposed to an RFP process bc the RFP process will take too much time.

"DC Council Member Kenyan McDuffie, who is running the mtg, asked if this process has any integrity."

McDuffie had this to say: "Simply put, sports betting in the nation’s capital is not working. Tell the public what’s gone wrong, and more importantly, what precisely they intend to do to fix the mess that’s been made."

- Gilbert Horowitz, Gambling911.com