In 2019, Intralot and VSC sought to persuade District agencies and the Council to award them the $215 million.
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.
“This is a warning to any company that tries to manipulate and exploit District contracting laws, especially laws intended to build the capacity of the local businesses vital to our economy,” said Schwalb. “Intralot and VSC’s sports betting deal was a sham from the start—an elaborate scheme to secure a lucrative, high-profile opportunity on a sole-source basis while circumventing the District’s small business contracting laws. My office will continue to enforce the False Claims Act to root out contracting fraud, hold accountable anyone who tries to get over on the District and its taxpayers, and level the playing field for law-abiding companies seeking to do business with District government.”
Under the terms of the settlements:
- Intralot will pay $5 million to the District
- VSC will pay $1.5 million to the District
- Both companies agree to accurately report contract and subcontract information in any future bids, contracts, or subcontracting plans with the District.
- In any current or future District contracts, Intralot agrees not to use any entity to provide resources to a District business with which it has a subcontracting relationship, and VSC likewise agrees not to use any undisclosed resources provided to it by any other entity.
