DC Council divided on how, whether to be 1st in US to offer gov’t-sponsored online gambling
By Associated Press
January 26, 2012
WASHINGTON — The District of Columbia Council remains bitterly divided on how, or even if, the nation’s capital should have the first government-run online gambling venture in the United States.
Online gambling is already legal in the district, but it became law in an unusual way. A councilmember inserted language that would allow online poker, blackjack and other games into a budget bill and it became law last spring when Congress declined to intervene. Some councilmembers were unhappy with that process and want to roll back online gambling before it starts.
On Thursday, D.C. Lottery officials said during a council committee hearing that with the council’s blessing, they could launch the website to offer the online games within 30 days. But Councilmember Jack Evans, who chairs the committee that’s considering a bill to repeal the law, said he’s not concerned if there’s a delay in rolling out online gambling, or even if D.C. is the first in the nation to do so.
“Given where we are now, should we go back and revisit it or not? That’s what I’ll decide,” said Evans, a Ward 2 Democrat. “There’s no rush to get this done.”
The repeal bill was introduced last year by Councilmember Tommy Wells, D-Ward 6, and at least two of the 12 other councilmembers support it. The councilmembers who want to repeal online gambling also are concerned about the district’s $39 million contract with Intralot, its Greece-based lottery vendor.
While online gambling essentially is banned in the United States, the Justice Department clarified last month that states can authorize it within their borders. Several states are expressing interest, but only Nevada and the district have approved laws or regulations authorizing online gambling. Officials in Nevada have said they hope to begin offering online poker by the end of the year.
The lottery’s executive director, Buddy Roogow, said Thursday that the lottery no longer plans to offer the online equivalent of slot machines out of respect for district voters, who have rejected slots in the past. Games would be free for 30 to 60 days after the launch to allow for software to be tested, he said.
Players would have to be at least 19 years old and would only be allowed to wager $250 a week. The low limits are intended to appeal to recreational players and not professional gamblers. The lottery intends to verify Internet protocol addresses and use global positioning software to ensure that players are within the borders of the district. Interstate online gambling remains illegal.
The office of Chief Financial Officer Natwar Gandhi has estimated that online gambling will bring in $13 million over four years after Intralot takes a 50 percent cut. The figure has not been revised to reflect that other states might move in ahead of the district.
During the hearing, Council member David Catania, I-At Large, accused Gandhi of “going rogue” by inserting the online gambling language into the lottery contract without approval from the council and suggested that Gandhi should step down. He threatened to sue Gandhi’s office for illegally altering the contract if online gambling goes forward.
“I’m pretty sure we can throw a monkey wrench into this,” Catania said at a hearing on the program.
Gandhi said there was nothing improper about the change to the contract. The D.C. Inspector General has cleared Gandhi’s office of illegal conduct, but his report raised questions about the way the gambling language was added.
The contract did not specify that Intralot would be able to bring online gambling to the district. Instead, it only included language about “nontraditional games.” After it was approved in 2009, the contract was amended to specify that Intralot could implement an online gambling system.
Some councilmembers have said they did not know they were putting the district on a path toward online gambling when they approved the contract, and civic activists have complained about a lack of transparency in the process.
Councilmember Michael A. Brown, I-At Large, who has led the push for online gambling by inserting the measure into the supplemental budget bill, said there still was value in coming first. He expects people to travel to the district from nearby states to play legal online poker instead of playing on unregulated overseas sites.
“Very rarely do we get an opportunity to get the revenue out of pocket from people who visit this city,” Brown said. “I do think if you’re first to the marketplace, you do get a little bonanza from that.”
