The Washington DC Superior Court has denied a request for an injunction to block the DC Lottery’s no-bid contract with Intralot, meaning the Lottery can resume work towards launching the district’s mobile sports betting platform.
The decision by Judge John Campbell forms part of mobile app developer Dylan Carragher’s lawsuit against the District, which argues the deal violates the Home Rule Act that established the powers of Washington DC.
In September, Judge Joan Zeldon issued a temporary restraining order suspending the contract until the decision on the injunction was made.
As part of its request for an injunction, Carragher’s legal team argued that the Act, “cannot be amended of circumvented by amendment to DC law by the district government”. The DC Council’s move to bypass the typical procurement process by amendment was therefore illegal, it claimed.
In its response to the request for an injunction, the DC Lottery said that Carragher’s claims were “without basis” and that “the plaintiff falls far short in proving entitlement to such extraordinary relief”.
The lottery’s deal with Intralot has been the subject of controversy for some time. When it was announced in February that the deal would be extended without a bidding process, Councilmember David Grosso referred to the decision as “a giveaway”.
The deal’s subcontracting details drew particular scrutiny. According to the subcontracting plan Intralot provided to the District’s chief financial officer’s office, $109.7m worth of work as “operations manager” was to be subcontracted out to a company named Veteran Services Corp (listed as Vital Services Corp. in the subcontracting plan). VSC’s chief executive was Emmanuel Bailey, a major political donor in the District.
The connections with VSC came into further question when it was revealed by the Washington Post that the company — which fit the District’s requirement as a locally-based subcontractor — appeared to have no employees and that Bailey was employed by DC09, an Intralot subsidiary, suggesting Intralot was skirting the local subcontractor laws.
Although Intralot and the lottery may now continue their efforts to launch sports betting, this does not mark the end of Carragher’s suit against the lottery. The parties will offer scheduling proposals for the further steps in the case next week.