Washington DC Lottery under Scanner

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The online gambling proposal in Washington DC is going through a series of setbacks. First its implementation by DC Lottery was deferred till a process of public consultation was carried out. Then the public consultation itself was deferred. Now allegations that a contact awarded by DC Lottery was not above board have surfaced. This will have an indirect effect on the online gambling proposal. In columnist Colbert King's article in the Washington Post he refers to an investigation being carried out by Washington DC Inspector General Charles J. Willoughby into a $38 million contract awarded to Intralot by DC Lottery. Actually the investigation was initiated in July 2010 by the then attorney general, Peter Nickles.

King links this to the secrecy surrounding the passage of the online gambling bill by tacking it to the must pass budget. Describing the story as one of political connections and cronyism, King observes, "One thing's for sure: It's all about the money." The procurement laws called for contract to be preferentially given to a certified local, small and disadvantaged business. It would be next to impossible to find such a business that would have the capabilities to operate lottery systems. Therefore there was the need to have a small local company partner with a larger expert in this field and leave operational matters in the hands of the expert. The alleged underhand dealings occurred in bringing together a local company and an international expert.

The article written by King, states that DC Lottery awarded the lottery contract to the Greek gambling company Intralot in December 2009. Then in July 2010 Ward 8 council member Marion Barry revealed in an interview that he had informed Intralot that the council would grant its approval to the contract only if Intralot took on a local partner. Barry further said that he saw an opportunity for a reputable, substantial black businessman to get into the lottery business. King writes, "Barry was speaking of Emmanuel S. Bailey, whose local firm, Veterans Services Corp., got a majority stake in the $38 million contract." When contacted by King, Willoughby refused to confirm or deny that any investigation was in progress. Intralot has denied any impropriety in the deal.

This story has a connection with the online gambling proposal of Washington DC. The main architect of the bill was independent councilor Michael A Brown. Brown did not disclose to the council that he was employed by the legal firm Edwards Angell Palmer & Dodge as a senior public policy adviser in the government relations department for which he was paid a salary of over $240,000 in 2010. Some of the clients of the legal firm will benefit from legalized online gambling in Washington DC. This issue, which had been apparently given a burial, is bound to get dragged out again.

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