Intralot's government sports betting contract deemed legal

Washington D.C. Intralot Sports Betting Lawsuit Dismissed For Lack Of Standing

An attempt to challenge the validity of Washington D.C.’s chosen online betting provider has failed. Intralot, a Greek company, was selected by the District in 2019 to operate the GambetDC sports wagering contract on behalf of the D.C. Lottery.

Last week, appeals court threw out the civil case because it determined the plaintiff lacked standing to actually receive damages. This result legitimizes the D.C. Lottery’s near-monopoly on online wagering in the District.

The situation for sports betting in D.C. is complex. The Lottery can offer it online anywhere except on federal land. However, private companies can conduct retail sports wagering and a more limited form of online betting.

It’s usually the case that online wagering beats retail in a landslide, but Intralot’s product has proven unpopular. With its continued position as the Lottery’s operator, the dominance of retail betting in D.C. is likely to continue.

What was the Washington, D.C. Intralot lawsuit all about?

The suit’s sole plaintiff, Dylan Carragher, argued in his complaint that the lottery violated the jurisdiction’s law when it awarded the contract for its online wagering platform GambetDC to Intralot. Carragher owns a web domain related to gambling.

He believed the lottery’s action to give Intralot a sole contract limited his ability to compete. After losing the case at the Superior Court level, Carragher appealed.

The District petitioned the court for summary judgment on its motion to dismiss and the court granted that request. Last week, the appeals court sent the case back to the Superior Court with its order to dismiss is for lack of standing.

“Mr. Carragher did not allege below that he wanted to operate the District’s sports gambling platform, nor did he suggest that he would have submitted a viable bid had the contract been opened to competitive bidding. Instead, the harm he alleged was his frustrated desire to launch his own online sports betting platform designed to compete in D.C.’s sports wagering marketplace. But that marketplace does not exist. Nor would one have emerged in the event the District accepted competitive bids for awarding a contract to operate its own platform. …So even if we assume Mr. Carragher substantiated his claim that the Intralot contract is more costly than a contract that is competitively bid, that would show only a diminishment of expected revenues from the challenged gaming contract. It does not show the allegedly unlawful contract is funded by…taxes which is the burden he had to carry under…to establish municipal taxpayer standing.”

So unless the D.C. Council changes the law in the District on this subject, it looks like Intralot’s operation of the only online sportsbook available throughout the jurisdiction will continue. That should be music to the ears of companies like William Hill.

Why this is great news for brick-and-mortar operators in D.C.

Strictly speaking, Intralot doesn’t hold a monopoly, even online. Its competitors must have facility partners, however, and can only accept wagers within geofenced limits relevant to those facilities.

For example, bettors will be able to use the William Hill app at Capital One Arena but only within a two-block radius of the stadium. Owners of bars, restaurants, etc. can also offer on-site online and retail wagering.

So far, the “pop-up” sportsbook inside the ticket window at Capital One has dominated GambetDC in terms of handle. In August, for instance, bettors wagered over four times as much at those windows as they did on GambetDC’s app/website.

Common criticisms of Intralot’s product are a lack of variety in markets and noncompetitive odds. With no online competition in the District, there’s little reason for Intralot to improve the product.

Despite the convenience of online wagering, bettors in D.C. seem inclined to opt for a better product at retail books. Intralot’s contract is now firm. Those circumstances may entrench retail dominance in D.C. as well.

- Derek Helling is a lead writer for PlayUSA and the manager of BetHer. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.
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