DC Appeals Court Tosses Lawsuit Against $215M No-Bid Intralot Sports Betting Contract
Posted on: October 25, 2020, 10:39h.
Last updated on: October 26, 2020, 08:54h.
An appeals court panel in the District of Columbia on Thursday ruled that a case brought by a Washington resident against the District regarding its sports betting contract with Intralot should be dismissed for lack of standing.
Dylan Carragher brought forward the appeal after a DC Superior Court judge approved a motion for summary judgment by DC officials last December. The DC government claimed it acted lawfully when the DC Council awarded a $215 million no-bid contract to the Greek-based gaming technology company to manage the DC Lottery’s sports betting operations.
Carragher owns a website, esportsbet.gg, that he claims was harmed because it could not seek an opportunity to do business with the lottery. Carragher initially won a temporary restraining order against the District last year, but his request for a fuller injunction was denied a year ago.
After Carragher filed the appeal, District officials countered that he could not sue because he was not harmed by the Council’s action. The court agreed, saying he was not directly affected by the allegations he made.
“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,” the judges wrote. “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.”
DC Court Rejects Taxpayer “Injury” Claim
But Carragher also made a second argument in his appeal, claiming that as a District taxpaying resident, he suffered a monetary “injury” because of the no-bid contract. In this instance, the claim was not tied to his business, but the insinuation that the District failed to get the best value for the sports betting operations contract since it did not use a competitive-bidding process.
The appeals judges said the plaintiff could not provide any proof or evidence that would allow the claim to survive a summary judgment order.
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,” the judges opined. “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.”
In its ruling, the appeals court did vacate the summary judgment order, but gave the case back to the Superior Court to dismiss for the lack of standing.
Neither Carragher’s attorney nor the DC Lottery could be reached for comment.
Retail Site Outperforms DC Lottery Sports Betting App
While GambetDC, the Lottery’s sports betting operation, has been offering betting since late May, it has already been surpassed by the only retail sportsbook in Washington.
In September, Gambet recorded a handle of $3.3 million and gross revenue of nearly $500,000. That was nearly a quarter of the handle William Hill took in at its brick-and-mortar venue at the Capital One Area. That book produced a handle of $12.2 million and gross gaming revenue of $1.3 million, which resulted in more than $130,000 in tax revenue.
In most states, online sports betting dominates the retail market. But in DC’s case, the app is likely harmed by the higher margins on odds than William Hill. For example, none of next week’s NFL spread bets features the typically standard -110 odds. Instead, the odds start at -118 and diverge from there.
For a $100 bet, the -110 odds would net $90.91 while the -118 odds would net $84.75.
The DC sports betting law allows major sports stadiums and arenas, like Capital One Arena, to host a sportsbook and receive a 2-block exclusive radius. Bars, restaurants, and other businesses can also pursue licenses, while Gambet is available online in other parts of DC that are not owned by the federal government.