Washington DC sports betting contract results in US$6.5 million fine
Intralot and its subcontractor, Veterans Service Corporation (VSC), have been fined US$5 million and US$1.5 million, respectively, in relation to information provided to city officials to secure a multi-million-dollar exclusive sports betting and lottery contract with the district.
An investigation by the Attorney General’s Office revealed that in 2019, Intralot declared that VSC would perform 51% of the work with its own resources. Intralot’s contract was awarded on the premise that it would be subcontracted to small businesses in the district, as DC law requires that 35% of substantial government contracts be subcontracted to local businesses.
However, according to the Attorney General’s investigation, both companies secretly agreed to have an Intralot subsidiary provide most of the resources. Intralot’s quarterly reports failed to disclose $4.3 million in payments that it received from VSC, which the company added in a restated report.
“This is a warning to any company that tries to manipulate and exploit District contracting laws, especially laws intended to build the capacity of the local businesses vital to our economy,” Washington DC’s Attorney General Brian L. Schwalb said.
“Intralot and VSC’s sports betting deal was a sham from the start – an elaborate scheme to secure a lucrative, high-profile opportunity on a sole-source basis while circumventing the District’s small business contracting laws. My office will continue to enforce the False Claims Act to root out contracting fraud, hold accountable anyone who tries to get over on the District and its taxpayers, and level the playing field for law-abiding companies seeking to do business with District government.”
As part of the settlement, both companies agreed to accurately report future contracts, subcontracting bids and plans.
In addition, Intralot agreed not to use any entity to provide resources to a District subcontracting partner, and VSC agreed not to use any undisclosed resources.
