Disagreements Erupt Among Washington D.C.'s Sports Betting Dealers – Insight
Washington DC's sports betting program, marked by recurring issues, saw high-ranking officials earning substantial salaries despite the venture's financial underperformance, causing unrest among participants, as reported by documents published Wednesday by Axios.
The story adds to the struggles faced by sports betting in the capital, where city officials chose to give exclusive access to a homegrown sports gambling app over established players like DraftKings, as seen in other states. The app, GambetDC, was a collaboration between Intralot, a Greek gaming services company, and Veterans Services Corp., a lottery subcontractor in the Washington area.
As per documents obtained by Axios, executives from Intralot felt uneasy about the around $1.4 million they were annually paying to VSC and their poor performance.
"The VSC principal earns a salary seven times higher than the salary of the District’s Mayor, without being tied to any actual work or performance," wrote the former CEO of Intralot US, Byron Boothe, in a 2022 letter to DC lottery officials, as reported by Axios. DC Mayor Muriel Bowser's salary was $220K last year, according to Axios.
Intralot "reluctantly agreed" to pay VSC, and Boothe criticized that "VSC cannot perform anywhere close to 51%" of the work it was contracted to do "on its own," as reported by Axios. Boothe did not provide supporting evidence, according to the reporting.
Criticisms and Shortcomings
In a separate letter earlier this year to small business officials in DC, Boothe reiterated his criticism of VSC and stated that Intralot had to compensate for VSC's deficiencies.
"This cannot continue," Boothe wrote in January.
Intralot chair Nikolaos Nikolakopoulos retracted Boothe’s comments in his own letter to DC officials two weeks later, as reported by Axios. Intralot announced Nikolakopoulos was replacing Boothe as CEO on Feb. 15, a week after Nikolakopoulos’ sent the letter. Boothe continues to serve Intralot as a strategic consultant.
Responses to requests for comment from Intralot, VSC, and the DC Office of Lottery and Gaming were not immediately received Wednesday.
DC legalized sports betting in 2018 and GambetDC launched in early 2021 after the City Council approved a no-bid contract for Intralot, with VSC retaining a 51% stake.
Problematic Origins
GambetDC has been beset by troubles since its inception, including its infamous crash during the 2022 Super Bowl.
The app lost $4 million in its first full year of operation, significantly below initial estimates that it would generate $27 million in its first year. In fiscal 2022, GambetDC generated $2.7 million in revenues, significantly below initial projections.
Dissatisfaction with GambetDC’s performance led former DC Councilmember Elissa Silverman (I-At Large) to propose legislation last year that would have ended the Intralot contract. It aimed to open DC's sports betting market to private competitors, similar to the approach in neighboring Virginia and Maryland.
The Council did not act on the legislation, and Silverman subsequently lost her reelection race in November, but other council members have shown interest in the concept.
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