The Greek gaming giant Intralot has been facing tough questions about its management of D.C.’s sports betting program ever since it won the controversial contract five years ago. Now that the company is on the cusp of losing that business, an investigation of these issues would fall firmly into the “better late than never” category.
Yet it appears that such an investigation could be underway, courtesy of D.C. Attorney General Brian Schwalb. The AG’s office is demanding documents from Intralot as part of some sort of ongoing investigation, according to filings in D.C. Superior Court. But the court papers filed July 22 are under seal, as are any records Intralot provides, according to the judge’s Aug. 1 order.
Nevertheless, the filings point toward the general thrust of Schwalb’s probe. In asking for the court to compel Intralot to hand over these materials, the AG’s office cites a section of the D.C. code outlining its authority to investigate violations of “false claims” laws. As the AG’s own website says, the most common examples of such violations “include contractors and grantees who seek to have the District pay for work that was not fully or properly performed.” Intralot and its subcontractors have faced persistent allegations of doing just that when it comes to its sports betting operation in D.C., raising concerns among city regulators dating back to the beginning of its deal with the District in 2019. Intralot also runs D.C.’s traditional lottery offerings, but those have not faced nearly the same scrutiny.
A spokesperson for the Office of the Attorney General declined to comment when Loose Lips asked about the filings. Intralot spokespeople did not respond to requests for comment.
D.C. could soon be getting out of the sports betting business after the Council agreed to open the market to private sportsbooks in this year’s budget. The vote follows a turbulent five years of Intralot running the city-backed wagering regime. The District nominally still runs its own sports betting product, but its future is very much in doubt after Intralot’s top subcontractor, the betting behemoth FanDuel, said it would abandon its partnership with the company if the Council followed through on its plan to open up the market. Still, an investigation could have serious consequences for Intralot moving forward.
Not only could Schwalb pursue financial penalties against the company, he could seek to bar Intralot from doing business with the city moving forward. And, for now at least, Intralot is still a major city contractor. Although its initial five-year contract to run sports wagering expired last month, the Council agreed to a one-year, $39 million extension that runs through July 2025. That deal also wraps in the other lottery services Intralot has provided the city for many years now. (The D.C. Office of Lottery and Gaming initially requested a two-year extension of the contract, but withdrew that request shortly after the Council approved the sports betting changes in the 2025 budget.)
There’s no telling what the OAG is focusing on in this probe, but it seems relevant that city agencies have flagged potential violations of procurement laws by Intralot and its partners for several years.
For instance, the D.C. Department of Small and Local Business Development has repeatedly warned Intralot that it’s at risk of running afoul of the city’s “Certified Business Enterprise” requirements. The law stipulates that out-of-town firms have to give a piece of big contracts to small, local businesses, and Intralot struggled to meet its commitments in the $215 million sports wagering deal. As of last year, Intralot still hadn’t managed to spend tens of millions with the local firms that it originally promised. (DSLBD reviews CBE compliance and has the authority to refer cases to the OAG for prosecution.) D.C. Auditor Kathy Patterson raised similar concerns in a report three years ago.
Intralot itself frequently argued that it couldn’t manage that spending because one of its top subcontractors, Veterans Services Corporation, wasn’t living up to its promises. The small firm, run by political insider Emmanuel Bailey, has raised suspicions among lawmakers for years that it didn’t have the capacity to meaningfully run sports betting in the city and was included in the deal merely to help Intralot meet the city’s requirements for small business participation in the massive contract. VSC has repeatedly contested those claims, but even Intralot has tried to kick the subcontractor out of the deal over these complaints. (The city never allowed it to do so, prompting accusations from Intralot that D.C. officials were protecting Bailey’s interests for political purposes.)
The AG’s probe could, at last, drag all these issues out into the light. It’s a bit puzzling that it has taken so many years for someone to start looking into this—despite the steady drumbeat of stories from LL and other reporters documenting irregularities with the contract. But a court case would provide some welcome, if belated, transparency into what went on here.