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Company Involved in D.C. Sports Betting Deal Has No Employees

Washington DC Sports Betting Contract

The saga of the sports betting contract in the District of Columbia is like the gift that keeps on giving. And it may come to an unfortunate end for somebody. Currently, there are two members of the D.C. Council – Robert C. White Jr. and Elissa Silverman – who are asking that the government conduct an investigation of a company that alleges that it is a local enterprise, and as such, helps to meet the requirements for getting a government contract, but may not be much of an enterprise at all.
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Saga Of The Washington DC Sports Betting Contract

This all stems from a report in the Washington Post in which it was revealed that Veteran Services Corp., which was used by Intralot, the company that was awarded the $215 contract, as its local representative, in effect. This deal came without a bid, which looked dubious to begin with, and now it has been discovered that this company doesn’t have any employees, and some of the executives that it has listed on its website don’t even work for them.

It’s a somewhat complicated story, but the gist of it is that Intralot submitted documents that stated Veterans Services was going to, in its own words, “perform the ENTIRE subcontract with its own organization and resources.”

However, back in 2009, when Intralot was pursuing the D.C. Lottery contract, Veterans Services had been vetted by city inspectors for its eligibility as a “local business,” they found that the company was owned by a 75-year-old woman named Barbara Bailey, whose son Emmanuel Bailey actually operated the company but was a Maryland resident. They found that Veterans Services operated out of Mrs. Bailey’s home, with two desks and a computer. And although the inspectors came to the conclusion that it did not qualify as a local business, they were overruled. Emmanuel Bailey, it was revealed, had contributed in excess of $30,000 to D.C. candidates for office, so perhaps some influence had been pedaled.

D.C Lottery And Intralot

Problems arose from the corporate structure that existed when Intralot began operating the D.C. Lottery, because it did so through a subsidiary called DC09. Veteran Services owned 51% of DC09, but Barbara Bailey’s 51% of Veteran Services did not, of course, translate to that same percentage in DC09. Yet, Intralot controlled and financed DC09, so as a result, the Greek-based company was performing all tasks necessary to carry the lottery off, when much of that was supposed to involve local interests.

In 2013, when Veterans Services applied for certification as a local business, it had no employees for the previous three years, according to D.C.’s Department of Small and Local Business Development. There were again no employees or wage reports two years later. Certain parties who have been listed as “vice presidents” had no idea that information even appeared on the company website.

Three years ago, Intralot was bidding for the Maryland lottery, in conjunction with Veterans Services. And they listed a Maryland address. But when Veterans Services was evaluated by officials, the conclusion was that they had “no capital, very limited business or industry experience,” and that they could not really explain what role they would actually play in the lottery operation. Even Emmanuel Bailey himself expressed that his company did not have any financial resources to carry out its contractual responsibilities.

So these are the people who will be accepting wagers from the public in the name of D.C. sports betting. Perhaps pending an investigation, which might be long overdue.

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More Conflict of Interest Reported in D.C. Sports Betting Deal

More Conflict of Interest in D.C. Sports Betting Deal

As if the story behind the no-bid contract for sports betting in the District of Columbia wasn’t bizarre enough, now we have what appears to be a case of nepotism that was connected to the vote that made Intralot the sole vendor. And some say, with a certain degree of sarcasm, that it is almost refreshing that the new development does not concern beleaguered D.C. Council member Jack Evans.

Why Is There More Conflict of Interest In The D.C. Sports Betting Deal?

The Washington Post has reported that the council member who cast the deciding vote on the matter – Kenyan McDuffie, who oddly enough had expressed skepticism about the unusual arrangement, which was closed to competitive bidding – is the cousin of the man who has been identified as a beneficiary of the sports gambling contract, to the tune of $3 million over a five-year period.

Keith McDuffie is a partner in a company called J.L. Terrell Construction, but that is not what is at issue. The problem is that, listed at the same address, is another entity, known as “Potomac Supply Company,” which, as an adjunct to the sports betting deal, will get the $3 million to provide commercial paper products in the role of a subcontractor.

Keith McDuffie listed as Potomac’s chief executive officer and principal contact

And when asked to submit detailed information about their vendors to the Council, Intralot had Keith McDuffie listed as Potomac’s chief executive officer and principal contact.

And where did Intralot get that kind of information? Well, from McDuffie himself.

Yes, this much is true, according to the Post’s report. Keith had made this communication, as per the request, directly to Emmanuel Bailey, an executive with the Greek-based Intralot who is the company’s main contact in the D.C. area with regard to the contract.

The official filing with the city lists one Okera Stewart as the owner of Potomac Supply. And while he admits that Keith McDuffie is “a childhood friend,” he insists that he has no financial interest in the company.

However, Keith sent the information about Potomac from his own email account. And Stewart’s explanation about that is flimsy at best, as he was having “technical problems” with his own email account. It is perhaps strange that in earlier versions of the Intralot proposal that came before the Council, during a period when Kenyan McDuffie was not a proponent of it, there was no mention of his cousin or Potomac Supply. But he shifted gears later.

Kenyan McDuffie has defended his vote on the council on the basis that the contract with Intralot is good for the city. But it is, in fact, the competitive bidding process that ideally ensures that residents of the district will get the best deal possible.

And it is important to note, as his cousin Keith and Okera Stewart were scrambling around for answers, that this issue of the possible conflict of interest wasn’t even addressed until the Post uncovered these documents.

Jack Evans, the most vocal champion of the no-bid contract with Intralot, was stripped of his position as chairman of the Committee on Finance and Revenue for the Council and is under investigation by both the Council and the Department of Justice. He is embroiled in conflicts of interest about Intralot because it turns out that Intralot’s lobbyist in Washington, William Jarvis, is the registered agent for Evans’ private consulting firm, and has also given legal advice on its contracts.

There is a Campaign Finance Reform Act, which will ban on political donations from companies looking for large government contracts. But that does not go into effect until November 2020, so it has no impact on what is going on here.

This quote, from the Editorial Board of the Washington Post, sums things up pretty well:

“D.C. has established a procurement system that is steeped in politics and parochialism, with the checkered history to show for it. The shock would come from an absence of questionable practices and preferential treatment.”

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D.C. Sports Betting Deal is Swirling in Controversy

D.C. Sports Betting mad rush district of columbia

Somehow the notion of having legalized sports betting in this nation’s capital sounds pretty strange. But remember, the federal law against it (the Professional and Amateur Sports Protection Act) has been struck down, and in the mad rush for locales to enact legislation, perhaps it makes perfect sense for the federal district to follow suit.

Well, pretty soon the District of Columbia is going to see it. And when we say “mad rush,” we mean it, as they are racing to beat Maryland and Virginia to the money.

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Why Is This Washington D.C. Sports Betting Deal Swirling in Controversy?

Actually, the law to enable it has passed. But now there is an agreement, recently voted on by the D.C. Council, that brings an official vendor to the table.

And not everybody is happy about it. In fact, quite the opposite.

For one thing, the 7-5 tally approved a sole-source, no-bid contract. So what does that mean? Well, it means that it was awarded to one company and one company only, and without any competitive bidding process. And according to the city officials who have advocated for the eventual result, this solution was most desirable, giving the city the best possible return in the end.

The company that got the $215 million deal is Intralot, a Greek-based outfit that has brought a lot of controversy to the table with it. This is not just a matter of certain conflicts of interest between the company and the elected officials that pushed the arrangement through, but also the nature of the proposal itself.

The legislator who was most aggressive in bringing the deal to Intralot was Jack Evans, a council member who is not only well-connected politically, but also connected, it seems, to Intralot itself.

Evans is at the center of a literal and legal quagmire at the moment. There is a federal probe into alleged corruption on his part, and on Friday the D.C. Council voted to strip him of his position as chairman of the Finance and Revenue Committee, and they have hired a law firm to investigate any misconduct that involved him in his elected position.

FBI Raid On Georgetown Home

There is also a federal probe into his activities (which included an FBI raid on his Georgetown home) in which he may have used his public position for private gain. At the center of this investigation is a relationship in which Evans sponsored a bill to benefit a company called DigiMedia, then was later discovered to have received consulting fees and stock in the company.

He is also suspected of having a rather nefarious relationship with a lobbyist from Intralot, which his critics believe “greased the wheels” for this hasty vote on the no-bid contract.

It is important to note that Intralot will not be opening a sportsbook, but instead offering a “sports lottery” product that is similar to what has been offered in others states and Canada. It will be accessible through an app and a website. Intralot already operates the D.C. Lottery.

Is Real Money Gambling In D.C Unrealistic?

There are many who doubt Intralot’s claims as to what they will “hold” out of the sports betting revenues they are going to generate, which of course impacts what they will give to the district. Words like “unrealistic” and “faulty” are being used often to describe their estimates. And there is fear that if Intralot did indeed launch a product that remotely approached the forecast, it had no hope of being fair to sports bettors.

Ted Leonsis, the forward-thinking owner of the Washington Wizards and Washington Capitals, is jumping right into sports betting, to the extent where he is going to be hosting a sportsbook at his venue, the Capital One Arena. Nats Park and Audi Field will also likely have sports betting establishments. Intralot is not going to be a part of the deal for those places, however. And the legislation expressly forbids betting on colleges that are based in the District of Columbia, such as Georgetown, George Washington, and American University.