DC Lottery Sports Betting Injunction to be Resolved Quickly, Judge Says

Posted on: October 2, 2019, 12:42h. 

Last updated on: October 2, 2019, 02:34h.

Steve Bittenbender Read More

Expertise: Legislation, Sports Betting, Horse Racing.

A judge in the District of Columbia has extended an injunction against the DC Lottery from executing its contract with Intralot until Oct. 28, and set the date for a hearing to decide on whether to maintain the moratorium.

DC Superior Court Judge John Campbell scheduled a hearing for Oct. 18 to determine if the injunction, which was issued last week, will be allowed to stay in place beyond that date. That ruling comes after lottery officials responded to the initial complaint filed by a Washington, DC resident who claimed the District’s decision to award Intralot a sole-sourced contract to handle sports betting operations violated the law.

Campbell told the parties he planned to issue a ruling quickly on the matter.

DC Says Delay Costly

In responding to the complaint, DC Attorney General Karl Racine said the injunction would cause irreparable harm to the District. If government officials were forced to redo the solicitation and open it for competitive bidding, then online sports betting across DC may not happen for up to three years, he argued.

In the 2020 fiscal year, the loss alone would exceed more than $12 million, with the possibility of losses reaching $60 million if online sports betting cannot become a reality until 2023. Further, a delay would open the door for neighboring Maryland and Virginia to beat DC to the “lucrative” sports betting market.

Every day back a preliminary injunction is in effect, not only will the district lose substantial an irreplaceable revenue, but also its long-term competitive position in this marketplace will be increasingly damaged,” Racine wrote.

DC officials also defended the decision to not open the bidding for the Lottery contract to a full competition, saying the DC Council has the right to amend the District’s procurement laws. Intralot has provided gaming technology, including self-service terminals, to the Lottery for nearly a decade.

Based on DC’s sports betting law, the Lottery will oversee wagering across the district. While major sports venues, such as Capital One Arena and Nationals Park, will have the right to host a sportsbook, most bars and restaurants can also pursue offering sports betting.

However, the Lottery, through its network of retail outlets, will be able to accept bets across Washington. The Lottery’s online sports betting app will work similarly, as the apps for the stadiums will only work with a two-block radius of the venue, and the app for a bar’s sportsbook will only be able to work on-site.

The licensing for the sports venues and bars do not appear to be affected by this lawsuit. However, in the month since the Lottery approved sports betting regulations, it has yet to announce when the licensing process will officially begin for the private entities.

Plaintiff Seeks Opportunity

Dylan Carragher, the DC resident who filed the suit seeking to stop the Intralot contract last month, said in an affidavit filed last week that he owns a sports betting technology company and purchased the domain eSportsbets.gg. He said he did this in anticipation of the District legalizing sports betting.

Carragher’s web site states the company wants to provide customers with an opportunity to bet on “Esports,” which is typically defined as betting on video game competitions. However, despite what the affidavit says, the site does not say it will offer betting on traditional sports.

An email message seeking clarification wasn’t immediately returned.

Carragher said in the affidavit he approached Lottery officials about the competitive bidding process but was told there would not be any opportunity for other companies to compete.

Once Defendant’s contract with Intralot comes to its natural conclusion in 10 years, it will be nearly impossible for other sports betting companies, such as mine, to enter the market and compete with Intralot,” Carragher stated.

In July, the DC Council voted 7-5 to approve the sole-source award to Intralot. The approved contract duration was for five years with an estimated value of $215 million. It does include the possibility to be extended for up to five years.

DC officials called into question Carragher’s affidavit in their response, calling his statement “manifestly insufficient” because it did not provide detailed information about the business, including any real or forecast revenues.

“Even assuming plaintiff could compete for the award, he fails to plead that his alleged business has the capability to perform services under the Contract,” Racine wrote.