D.C.’s Sports Wagering Contract Hits Snag

A D.C. Superior Court judge last temporarily halted the District from moving forward on a contentious $215 million no-bid contract with Intralot — the company hired to establish sports wagering in D.C.

As previously reported on Conduit Street, the D.C. Council last year passed the Sports Wagering Lottery Amendment Act of 2018, which was signed into law by Mayor Muriel Bowser earlier this year.

Dylan Carragher, a mobile app developer, alleges that The Sports Wagering Procurement Practices Reform Exemption Act of 2019, which exempted the Intralot Contract from all but a select part of D.C.’s procurement law, violates D.C.’s Home Rule Act.

According to The Washington Post:

Earlier this year, the D.C. Council narrowly voted to suspend competitive bidding rules and allow Intralot, which already held the contract to operate the D.C. Lottery, to continue running the lottery and manage online sports gambling and related services as well.

In his legal challenge, Carragher said his business was not afforded an opportunity to compete for the contract. He also said, as a taxpayer, he was harmed by the District’s decision to circumvent competitive bidding because it eliminated the possibility of securing a better deal for taxpayers.

Proponents of the no-bid strategy claimed that it was the fastest way to bring sports wagering to Washington D.C. and that a competitive bidding process would have significantly delayed the rollout of mobile sports wagering.

The District claims that Carragher’s claim is invalid because “The D.C. Council’s broad legislative authority under the Home Rule Act extends to amending its procurement laws, and therefore it is plainly permitted to amend that law as it sees fit to, among other items, authorize award of a contract outside of the source-selection methods specified in D.C.’s procurement law.”

The U.S. Supreme Court last year struck down a 35-year-old federal law that banned sports betting in most states. Several states, including Delaware and West Virginia, have since legalized sports wagering.

The State’s fiscal picture, and a pending commitment to substantial new education investments, has driven talk of authorizing new activities that carry substantial new revenue potential. And while the Supreme Court’s decision effectively opens the door for Maryland to legalize sports wagering, it’s unlikely to do so, at least not any time soon.

Chapter 5 of the 2007 special session amended the Maryland Constitution so that after November 15, 2008, the General Assembly may only authorize additional forms or expansion of commercial gaming if approved through a referendum by a majority of the voters in a general election. And the General Assembly earlier this year rejected multiple proposals to establish sports wagering in Maryland.

That effectively halts the State from legalizing sports wagering in the short term. Even if a law were to pass next year, it would still require the approval of voters in the 2020 presidential election.

Stay tuned to Conduit Street for more information.

Useful Links

The Washington Post: Court Temporarily Halts District’s No-Bid Sports Gambling and Lottery Contract

Previous Conduit Street Coverage: D.C. Council Legalizes Sports Betting

Previous Conduit Street Coverage: Supreme Court Allows States to Legalize Sports Betting

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