After a couple of years of frustrating operations, tensions are allegedly bubbling over in Washington DC between the district lottery and its sportsbook platform provider, Intralot. However, the tensions are not about the lackluster performance of the app.
Axios first reported that Intralot leadership was frustrated the company has to pay a $1.4 million annual salary to Veterans Service Corps CEO Emmanuel Bailey.
“VSC’s principal receives a salary seven times higher than the salary of the District’s Mayor and untethered to any actual work or performance,” read a 2022 letter from former Intralot CEO Bryan Boone to the DC Lottery.
Two weeks after the letter was sent, Boothe stepped down as CEO and was replaced by former Intralot chairman Nikolaos Nikolakopoulos. The new CEO wrote to DC Lottery and retracted Boothe’s comments.
Why does Intralot need to pay this sum? The District of Columbia has a law that stipulates 35% of all government contracts need to go to local contractors. VSC has served as a subcontractor for the DC Lottery for over a decade and controls 51% of the sports betting contract. However, auditors have questioned the utility of their services. In 2021 auditors observed the only employees at VSC were Bailey and his mother.
The contract is set to expire next year.
Meanwhile, the DC Lottery holds an online monopoly with the GamBet app. Nonetheless, DC residents are actually wagering more with the retail sportsbooks in the area. They are arguably traveling to Maryland and Virginia where there are more competitive and open markets. The app is growing but 2022 fiscal year revenues amounted to just $2.7 million.