DC Lottery Looking For Sports-Betting Reset

January 22, 2024
The Office of Lottery and Gaming in Washington, D.C. said it intends to make changes to its beleaguered sports-betting platform during a contentious DC Council hearing in which a key lawmaker expressed frustration with the underperforming product.

The Office of Lottery and Gaming in Washington, D.C. (OLG) said it intends to make changes to its beleaguered sports-betting platform during a contentious DC Council hearing in which a key lawmaker expressed frustration with the underperforming product.

During a DC Council committee hearing Thursday (January 18), OLG director Frank Suarez testified that the agency is now working with lottery vendor Intralot to subcontract the GambetDC mobile sports wagering platform to a new private operator after the platform returned a transfer to the district of only $1.3m in fiscal year 2023, or less than half of the revenue it generated in the previous year.

“OLG and Intralot have evaluated the current platform and believe that evolving to one of the current privately operated platforms will better compete within the highly competitive DMV region, while sill maintaining a larger share of revenue and mitigating risk,” Suarez said.

“Having a strong, nationally recognized platform will help to quickly reverse the current trend and drive renewed revenue growth.”

Suarez said a subcontractor has already been identified by Intralot and that the OLG has approved that operator to “move through the process and be vetted,” but he did not disclose any additional information about the potential subcontractor in order to “maintain the integrity of the process.”

Although the idea of getting the first-mover advantage over neighboring states was a key factor in the debates over the decision to both legalize sports betting in 2018 and then awarding Intralot a no-bid contract to operate sports betting in 2019, GambetDC ultimately did not launch until March 2020, and as Suarez explained, failed to make a strong first impression.

“It launched at an 80 percent payout, it launched with a sort of clunky, not as user-friendly app, and that was hard to overcome,” he said. “Even with the changes we’ve made to the interface, I think there’s still player perception that the odds aren’t as good and the app isn’t going to work as well.

“We just realized after we did the research and understood that those perceptions are going to be difficult to change and that it would be best to go ahead and just replace the platform.”

This sudden shift was met with skepticism from councilmember Kenyan McDuffie, the committee chair who presided over the meeting, with Intralot’s lottery contract set to expire in July.

“The expectation you have of this committee and the public and anyone else who’s following what you’re doing is …with approximately six months left in the lottery contract, you figured out a better way to do things in terms of your mobile app, and we should just trust that you figured it out at this point,” McDuffie said.

McDuffie asked why the lottery would not open up a public request for proposals (RFP) to identify a sports-betting platform operator, to which Suarez responded that an RFP process would take “quite a bit of time to get through.”

“I think you would understand that I’m incredulous,” McDuffie said. “And I think most people, even casual observers, would be a bit cynical about what you just revealed this morning about the fastest way to get to additional revenue is by a subcontractor with the private operator.”

“I’m just trying to make sure this process actually has integrity,” he added. “What you’re suggesting is that you’ve identified a subcontractor through some fairly opaque process that you can’t share with the committee.”

Suarez clarified that Intralot had identified the subcontractor, as the company is permitted to do under its existing deal, and that the DC Lottery is merely approving that subcontractor.

When asked how long the process of approving the subcontractor would take, Suarez said: “It’s a good question, I’m not sure, I think we’re working through it.”

He said when officials started the process of reviewing the plan the goal was to have a new platform in place by the NCAA Men’s Basketball Tournament, but the lottery only started looking at this in either “November or December.”

He was also asked if the agency or Intralot talked to other potential subcontractors, to which he responded: “I don’t know. I don’t believe so, but I don’t know, I can’t speak for them.”

Lottery officials are set to appear before the committee again on February 14 for further oversight hearings.

In addition to the mobile platform, retail betting is available at locations throughout the District of Columbia, either utilizing the GambetDC platform with kiosks, or through separate licenses that allow professional sports facilities or other businesses to contract with private operators to offer retail sportsbooks and mobile betting on an on-site basis.

The sports facilities also have a two-block radius surrounding the property in which they can offer mobile betting exclusively.

The benefit to sports facilities has frequently been cited as a reason to protect the current model when compared to a model where multiple private operators could offer mobile betting throughout the district, similar to neighboring Maryland and Virginia.

Significant parts of the nation's capital, including most government buildings, are also geoblocked to disallow mobile sports betting due to federal laws that prohibit gambling on federal property.

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