Betting company Intralot resolves DC betting fraud investigation by paying a sum of $6.5 million to the Virginia Sports Betting LLC (VSC)
Intralot and Veterans Services Corporation Settle Allegations of Deceiving City Officials for $6.5 Million
In a significant move, Intralot and the Veterans Services Corporation (VSC) have agreed to pay a combined sum of $6.5 million to settle allegations of deceiving city officials. The settlement comes after an investigation led by Washington Attorney General Brian Schwalb, who accused the companies of an elaborate scheme to circumvent the District's small business contracting laws.
The investigation, initiated by Attorney General Schwalb, revealed that VSC, a DC-based company, was promised to be responsible for 51% of the work under the District's multiyear lottery and sports betting contract, but allegedly subcontracted this work to an Intralot subsidiary. Payments were reportedly found to have flowed from VSC back to Intralot.
The settlement serves as a warning to any company that may try to manipulate and exploit District contracting laws. Intralot and VSC did not admit any wrongdoing in the settlement. However, Intralot has agreed not to use any entity to provide resources to a District business with which it has a subcontracting relationship. The company also agreed to accurately report contract and subcontract information in any future bids, contracts, or subcontracting plans with the District.
VSC, in turn, agreed not to use any undisclosed resources provided to it by any other entity in any current or future District contracts.
The settlement cost breaks down to $1.5 million payable by VSC and $5 million payable by Intralot. The District's sole sports betting app, GambetDC, has been at the centre of controversy, with its high hold demanding unattractive odds, leading to its unsatisfactory performance. GambetDC was rolled out by Intralot, who promised a higher percentage of return from sports betting.
The settlement follows years of underperformance of GambetDC. In April, GambetDC was replaced with FanDuel's app, marking its debut in the District. Intralot and VSC had secured a no-bid, multiyear contract to offer betting across the District.
Attorney General Schwalb reaffirmed that his office is prepared to investigate any suspected fraud cases and hold any company that breaches the established laws accountable. He emphasised that this settlement serves as a warning to any business that may try to exploit the District's laws, especially those related to the SBE Act.
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