WASHINGTON — The company hired by D.C. Council to bring sports betting to the District now owes the city $6.5 million after an investigation revealed it lied about working with small local businesses to win the contract.
Intralot, a Greek sports betting and gambling services management company, was already running the D.C. Lottery when it was picked to host the online sports betting platform for the District in 2019. Unlike the typical contract bidding process, which would take around three years and cost the city $61 million, the council handed the $215 million contract to Intralot and didn’t consider any other bidders — in an attempt to fast track the process and beat Maryland and Virginia to the sports betting industry.
But Intralot had told city leaders that they were working with local small business subcontractor Veterans Services Corporation (VSC), a company they said would perform 51% of the work.
In addition to doing the majority of the work, VSC was also supposed to use all of its own resources and split its earnings with other small businesses. This was under the Small, Local and Disadvantaged Business Enterprise Development and Assistance Act (SBE Act) to help create opportunities for small businesses, known as certified business enterprises (CBEs) throughout the District.
An Office of the Attorney General investigation found that instead, an Intralot subsidiary was doing the work and providing the resources instead of VSC. In exchange, VSC gave Intralot a percentage of the money awarded to them by the District. Under this agreement, Intralot made millions of dollars.
“In implementing their scheme once they won the contract, Intralot and VSC inflated the amount of money Intralot spent subcontracting with VSC and other CBEs, and Intralot paid VSC’s owner hundreds of thousands of dollars per year for his participation. Both companies also lied to District agencies and the DC Council by submitting official documents with false information, including the subcontracting plan originally used to obtain the Council’s approval of the sole-source contract, verification forms that inaccurately documented the amount of work VSC performed, and quarterly reports that misrepresented how much Intralot spent subcontracting with VSC and other CBEs,” the OAG wrote in a statement.
Under the terms of the settlements:
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