A $6.5 million settlement has been reached between the District of Columbia and contractors Intralot and Veteran Services Corporation after it was alleged both had defrauded the District to gain a $215 million sole-source contract to operate DC's failed sports betting platform, GamebetDC.
The case revolved around DC's SBE Act, which states that 35% of all large government contracts must be subcontracted to small local businesses. Intralot said VSC, a local business, would perform 51% of the work on the contract. However, unbeknownst to the District it was an Intralot subsidiary that provided the work, not VSC while VSC funneled money back to Intralot.
Due to the poor performance of GambetDC, only $4.3 million was funneled back to Intralot as part of this scheme. Both companies denied defrauding the District, insisting the settlement was to avoid costly litigation.
A Problem From Day One
GambetDC has been in hot water ever since its inception in 2020. The app was the only sports gambling app that was legal District-wide, other sports gambling apps could only be used within a two-block radius of specific locations within DC's 61.1 square miles. Gamers were forced to live with whatever product GamebetDC put out, and that product was "a shitshow" according to one industry consultant.
In 2022, a botched update to GambeDC by Intralot broke the app for all Apple product users during the largest sports gambling event of the year; the Super Bowl. Apple users looking to wager on the game or its long list of props during the sports world's big day were treated with an error screen and locked out. A snafu that cost Intralot $500,000 to replay DC's Lottery commission for lost revenue and damage to their reputation.
The app also suffered from bad usability reviews and poor odds that favored the book. Despite its monopoly, by early 2024 GamebetDC held a poor 39% market share in the District. A market share that demonstrated gamers would happily go out of their way to make a bet on a different platform to avoid GamebetDC.
FanDuel Take Over
In early March 2024, the District announced that they'd be handing the reigns of their sports gambling monopoly to FanDuel. The nation's no.1 sportsbook would become the District's no.1 sports betting app.
Gamers within the District welcomed the change instantly with the total amount wagered in DC growing from $15.7 million in March to $26.6 million in April.
Month | Handle | Taxes Collected |
---|---|---|
March | $15,742,055 | $323,907 |
April | $26,649,703 | $1,392,454 |
May | $35,444,990 | $2,943,299 |
June | $29,627,133 | $2,172,561 |
July | $27,647,852 | $1,253,034 |
August | $40,583,711 | $1,050,503 |
September | $58,817,348 | $1,926,237 |
November | $68,272,811 | $2,056,657 |
December | $65,333,157 | $,899,740 |
Since changing from GambetDC to FanDuel, the District has seen taxes collected quadruple year-over-year with $16.3 million in 2024 compared to $4.4 million in 2023. The change has been beneficial to gamers and the district's revenues.