02/08/2012 : GAME OVER FOR WASHINGTON DC ONLINE GAMBLING?
Full city council votes 10 – 2 for repeal of controversial internet gambling law
Killed before implementation appears to be the fate of Washington DC's online gambling law; the city council voted 10 -2 Tuesday to repeal the legalization, which was passed over a year ago attached to a supplementary budget bill but has been caught up in contract irregularities involving the city lottery .
Political observers have opined that the repeal of the online gambling law was part of a wider move by councillors to ‘reconfigure' the controversial lottery contract, worth around $38 million.
The decision came despite a last-minute offer by the law's introducer, Councillor Michael A. Brown, to submit a compromise bill, and a communication from Mayor Vincent C. Gray saying he would conditionally support a re-bid of the entire contract if the council eventually revives i-gaming.
Mayor Gray has flip-flopped on the issue, initially supporting i-gaming and later withdrawing his support on the grounds that the matter had become too controversial.
Gray said his position on the lottery contract itself was predicated on the passage of an i-gaming law “in a much more publicly transparent manner” than the way it was passed by council in December 2010.
A triumphant Councillor Jack Evans, who has been the law's principal opponent and is chairman of the city's Revenue and Finance Committee, warned that more scrutiny of the lottery contract would be forthcoming.
Evans urged his fellow councillors to vote on any potential re-bid before lobbyists “swooped down on council members,” saying: "“There are so many questions about the lottery contract. It was really not done the way it should have been done.”
Council member Tommy Wells, who co-sponsored the repeal bill, said “I certainly have a lot of questions about the process of selecting the [local] partner in the lottery contract, and that’s a conversation I will be having with Mr. Evans.”
The Washington Post reported that recent concerns about i-gaming stemmed from a report by D.C. Inspector General Charles J. Willoughby, who determined that the city’s lottery contract with the Greek company Intralot was “materially changed” to include internet gambling shortly after its approval in December 2009. Council members in favour of the repeal said they had no way of knowing that “non-traditional” games in the contract would later be specified as internet gambling.
Further complicating the issue were irregularities in the lottery approval process and vetting flaws regarding Intralot’s local partner, businessman Emmanuel S. Bailey. Bailey was found by the inspector general to have misrepresented his Veteran Services Corp. firm’s business activities during its bid for a stake in the lottery contract.
Intralot and VSC have a joint venture which has spent $22 million launching the overall lottery system. Among those funds was between $5 million and $7 million for the i-gaming elements that have now been thrust into limbo by the council vote.
VSC took a loan from Intralot to pay its JV contribution.
Councillor Brown reiterated that online gambling was a good thing for the District, and said that the council should not have voted for repeal, even if members wanted to revisit the underlying contract. He reminded councillors that the public was largely in favour of internet gambling at a series of community meetings held by the DC Lottery late last year.
Some councillors voted for the repeal but were not against online gambling per se; it was felt that the process had been tainted and should be re-started from scratch.
In the aftermath of the vote, recriminations and denials were reported to have flown between various city officials regarding the procurement and processing procedures on the contract.
Intralot spokesman Byron Boothe, commenting on the repeal vote, said: “Intralot is disappointed in the council vote today. We look forward to assisting the D.C. Lottery as they move forward in exploring their space in today’s ever-changing gaming world.”