From delight to disdain
When Washington DC Mayor Muriel Bowser legalized sports betting in 2019, local bettors were understandably excited. They would finally have the chance to wager on a range of sports in their home state. But the reality – a sportsbook that didn’t go live until May 2020 – was far from what they had hoped.
Greek operator Intralot secured the right to operate DC sports betting through its GambetDC app. The no-bid contract extended Intralot’s existing deal with the District of Columbia Office of Lottery and Gaming, which had allowed it to operate DC’s lottery since 2010.
allowed Intralot to gain an unfair monopoly over the DC market
That sports betting deal, however, has faced criticism ever since. Opponents claim that the bidding process was not legal and has allowed Intralot to gain an unfair monopoly over the DC market, while GambetDC has also experienced several major issues since, prompting calls for an overhaul.
Despite the hopes of Intralot critics, DC officials have recently announced they intend to extend the deal with the Greek operator through at least 2025. In light of this, VegasSlotsOnline News has taken a deep dive into the issue to determine whether this might be a mistake.
Bad odds and technical issues
The first aspect of Gambet that DC residents took issue with were its uncompetitive odds. Since the sportsbook does not need to compete with others, it can dictate its own prices without (it thinks) much fear of losing customers. As a result, the sportsbook is paying out less than most other gambling outlets – both the legal and illegal ones.
Speaking with Pennbets, sports betting industry analyst Chris Altruda said: “Most of the lines on Gambet have been seen between -115 and -118” for a bet that other spotsbooks would price at -110. He argues that this isn’t enough to entice “the average bettor… who maybe bets $20 or $25 per game” or even more serious bettors who adhere to strict budgets. Intralot, meanwhile, defended its higher hold by arguing that its “mission is to return profit to the District.”
The odds aren’t the only problem though. Gambet has experienced several major technical issues since launch day. One of the biggest errors resulted in Intralot having to pay $500,000 to the city in compensation after Gambet went offline during the 2022 Super Bowl – the majority of which covered “reputational damage.” Users have also complained about the Gambet interface in general, deeming it clunky and not user friendly.
A legal problem
DC’s decision to even award Intralot the license in the first place did not go down well in a lot of circles, particularly with local sportsbook app creators. It directly contravened procurement laws requiring an open bidding process, and a law that requires local businesses to be favored over those from out-of-state, nevermind Greece. In fact, it began a lengthy legal case that at one point resulted in a restraining order on the sportsbook contract.
prevented him and other betting app providers from participating in the DC sports betting market
The main movement against the $215m contract came from a local app developer called Dylan Carragher. He argued that the no-bid contract illegally prevented him and other betting app providers from participating in the DC sports betting market. He filed a lawsuit in October 2019 and a 21-day restraining order was enacted to prevent the app from going live.
In contrast, however, Attorney General Karl Racine argued that the DC Council could change procurement laws as it deemed appropriate. Racine noted that blocking the contract would come at a cost of “millions of dollars in revenues,” to the District. This is an argument that ultimately led to a denial of Carragher’s injunction request. ?
An appeals court tossed the lawsuit against the contract for the final time in October 2020.
Underperforming revenue
As for revenue, Gambet isn’t performing as well as DC officials might have hoped.
A September 2021 audit by the Office of the District of Columbia Auditor found that Gambet DC was not meeting expectations. Sports betting tax revenue from 2020 to 2021 reached around $1.8m from the sportsbook. Of this total, $1.4m came from Gambet’s only competitor William Hill – which runs a retail sportsbook at the Capital One Arena.
The audit did discover that GambetDC had a greater revenue margin percentage than sportsbooks in other states, keeping around 17% of all sports bets. In comparison, Montana was second with around 12%. However, the auditor determined that Gambet could make more handle if it lowered its margin and provided better odds.
The app has continued to miss financial goals since its launch in 2020. It was supposed to make $92m in revenue for DC from 2019 to 2022. It missed that mark by a long way, returning nothing in 2019, generating $352,000 in 2020, costing DC $4m in 2021, and making just $2.7m in 2022.
The future
In 2022, it seemed like Intralot might get shown the door in DC. DC Councilmember Elissa Silverman introduced a new bill to “reboot” the sportsbook program, arguing: “We need to turn the page on this embarrassing episode.” Her legislation would have paved the way for a competitive market, allowing sportsbook giants to compete in DC. However, it failed to gain traction.
July 2024 marks the first point in which the city could free itself from its no-bid contract
Now, it seems that Intralot’s reign will continue for the foreseeable. July 2024 marks the first point in which the city could free itself from its no-bid contract. However, executives at the Office of Lottery and Gaming have told the Council repeatedly that they want to maintain the existing deal with Intralot.
If they do decide to extend the deal past 2024, it could mean Intralot will maintain control for up to five additional years. Frank Suarez, Head of the Lottery Office, said that the extension is likely to be a year at least, although that still remains to be seen as officials need to debate the topic. Local lawmakers will need to approve any extension too.
Instead of overhauling Intralot completely, the lottey is supposedly working with sub-contractors to replace the sports betting app with a better alternative while still retaining the current operator. Suarez has said he hopes to secure a “top performing, nationally recognized” sports betting company in the deal.
Others have questioned Suarez’s logic, however. Posing a question that it is difficult to ignore, McDuffie asked: “Why not just bid it out?” Either way, it seems that a large portion of powerful voices in DC are not about to give up on their Intralot sports betting experiment just yet.