Friday, December 30, 2011

Internet gambling repeal hearing Jan. 26


The District's Committee on Finance and Revenue, which has oversight over the D.C. Lottery, will hold a hearing Jan. 26 on a bill to repeal the Internet gambling law. 
The public is allowed to testify at these hearings. Details are below. You have until Jan. 25th to sign-up, although it's recommended that you do it earlier. 
If you can't testify in person, you can nonetheless submit a written statement to the committee. 
This is the first public hearing to be held on Internet gambling. The District approved its Internet gambling measure in Dec. 2010 as a budget rider. The law was approved without public hearing or committee review. 
This law is not the result of a sudden revenue-raising brainstorm by its proponents, but was part of a calculated effort to keep the public in the dark for as long as possible about the District's plans to introduce Internet gambling. District officials had been in talks for many, many months -- if not more than a year -- with its lottery contractor about the plan to create mini-casinos in neighborhoods as well as allow Internet gambling from home. 
This is the hearing notice
Council of the District of Columbia
Committee on Finance and Revenue
Notice of Public Hearing
John A. Wilson Building, 1350 Pennsylvania Avenue, N.W. Washington, D.C. 20004
________________________________________
COUNCILMEMBER JACK EVANS, CHAIR
COMMITTEE ON FINANCE AND REVENUE
ANNOUNCES A PUBLIC HEARING ON
The Matter of i-gaming
and
Bill 19-474, the “Lottery Amendment Repeal Act of 2011”
Thursday, January 26, 2012
10:00 a.m. until end or 1:00 p.m. recess, resuming at 6:00 p.m.
Room 412 - John A. Wilson Building
1350 Pennsylvania Avenue, NW; Washington, D.C. 20004
Councilmember Jack Evans, Chairman of the Committee on Finance and Revenue, announces a public hearing to be held on Thursday, January 25, 2012 at 10:00 a.m., in Room 412 of the John A. Wilson Building, 1350 Pennsylvania Avenue, N.W., Washington, D.C. 20004. The hearing will continue until all witnesses have testified or 1:00 p.m. and will recess. The hearing will resume at 6:00 p.m.
As a follow up to the June 29, 2011 Public Oversight Roundtable on the matter of i-gaming, the committee is providing another opportunity for the DC Lottery and Charitable Games Control Board to provide an update on the series of community meetings held in the fall of 2011, as well as implementation efforts of i-gaming in the District of Columbia. This measure was included in Title VII, Subtitle G. Lottery Modernization Act of Bill 18-1100, the “Fiscal Year 2011 Supplemental Budget Support Act of 2010,” which is now Law 18-370.
Bill 19-474, the “Lottery Amendment Repeal Act of 2011” would amend the Law to legalize Lotteries, Daily Numbers Games, and Bingo and Raffles for Charitable Purposes (DC Law 3-172) to eliminate online gambling.
The Committee invites the public to testify at the hearing. Those who wish to testify should contact Sarina Loy, Committee Assistant at (202) 724-8058 or sloy@dccouncil.us, and provide your name, organizational affiliation (if any), and title with the organization by 10:00 a.m. on Wednesday, January 25, 2012. Witnesses may specify whether they would like to testify at the 10:00 a.m. portion or the 6:00 p.m. portion. Witnesses should bring 15 copies of their written testimony to the hearing. The Committee allows individuals 3 minutes to provide oral testimony in order to permit each witness an opportunity to be heard. Additional written statements are encouraged and will be made part of the official record. Written statements may be submitted by e-mail to sloy@dccouncil.us or mailed to: Council of the District of Columbia; 1350 Pennsylvania Ave., N.W.; Suite 114; Washington D.C. 20004.

Monday, October 31, 2011

Here's the story on DC Lottery's gaming contractor

The company that has 51 percent equity in D.C. Lottery’s operation is a little known firm called Veterans Services Corp. (VSC)

What role does VSC play?

Intralot, a Greece-based gaming company, won the city’s $38 million lottery contract in 2008. Council members wanted Intralot to have a local partner. That partner became Veterans Services Corp. in 2009. According to the Washington Post VSC holds 51 percent of the equity in the joint venture running day-to-day lottery operations.

VSC was formed in 2009. It was just starting out when inspectors from the District of Columbia Department of Small and Local Business Development conducted a site visit as part of the District's business certification process.

The document below was the result of inspection in August 2009.

VSC was approved as part of the lottery contract by the District Council in Dec. 2009, less than four months later.

VSC describes itself, in documents to the District, as “a professional services consulting and professional staff augmentation company.”  It says it can deploy staff with security clearances, and people with skills such as “certified information systems auditors.”

VSC, along with Intralot and D.C. Lottery, will be running gambling system that delivers poker, bingo, blackjack, and slots to District residents, and in bars, restaurant and hotels in neighborhoods.

Among its skills, the company said on government documents that "VSC has an extremely strong IT practice providing a wide range of services, including; Network Security, Systems Migration and Deployment, Network Operations, and Data Base Management. VSC technical programming expertise, includes, but is not limited to: VBA, UNIX, SAS, SQL, etc.". 

What the District inspectors found, was an operation being run out of home that lacked records. And despite that technical expertise cited by VSC, the site visit report by the District's inspectors found that of the company’s had two Dell computers and “one was not working properly.”

The city’s site visit report also includes some check-off sections, Y/N and N/A (non applicable.)

It found:

Bookkeeping and other record keeping – N

Payroll Maintenance – N

Receipt of business telephone calls and phone – N

Receipts evidencing payment of telephone service by the firm - N

According to city records, VSC was certified Aug. 28, 2009 for two years.

Here is the document

Click to enlarge


There's more: for the full document PDF click here

Saturday, October 29, 2011

D.C. Lottery's high limit slots



The new Internet gambling law approved by the District Council, a law adopted without public hearing, committee review or real public notice, will give the D.C. Lottery enormous ability to expand its predatory gambling practices.

This law gives D.C. Lottery the power to determine the types of games it wants to deliver to the public. This is why it is putting in slots and bingo, along with poker.


Remember, the argument proponents raise in support of Internet gambling is that the District loses gambling tax revenue to offshore venues.  Proponents of gambling in D.C. describe the typical offshore gambler as a poker player with middle to above incomes. By offering poker, supporters of the law said D.C. will recover lost tax revenue and extend consumer protections to people now betting offshore.

So what happens next?

D.C. Lottery officials outlined a plan intended to draw in a broader demographic by offering bingo and slot-type games. They want new types of gamblers to play their games, people who have never played offshore games, people who probably don't even know they exist.

D.C. Lottery wants to expand Internet-based gambling to fixed income seniors and lower income populations by offering bingo and slots and who knows what other magical online games. D.C.'s large college-age population will be a target as well.

In the new Internet gambling law, D.C. Lottery also has the power to determine where neighborhood mini-casinos are located and how many of them can be established. The law, itself, sets no limits, no safeguards, no oversight. The regulator is the D.C. Lottery.

When it comes to consumer protection for neighborhoods, there is none.

In Las Vegas they have separate areas where people can play "high limit slots." Typically, those machines are at least $5 and above.  The higher the bet, the higher the payoff. But that brings a higher margin to the casino, and that's what D.C. Lottery is interested in.

The Council's new Internet gambling law puts D.C. Lottery on the path to becoming a corporate sociopath.

District Council members have been willing enablers of this mess, approving a law under the public radar and then giving lottery officials the ability to do just about whatever they want.


Thursday, October 27, 2011

Ward One Internet gambling meeting Nov. 1


Here's a note posted about it on the Adams Morgan list: 

D.C. Lottery will be holding a community meeting on the new Internet gambling law on Tuesday, Nov. 1 at the Marie Reed Learning Center, 2200 Champlain St. NW, 6:30 p.m. to 8:30 p.m

These meetings are being held in each Ward to inform people about some of the implications of a new law that allows Internet-based gambling in homes, restaurants, bars and hotels.

Here are the major points to consider:

-- Last December, the District Council approved as a budget rider. There were no public hearings or committee reviews. Public notice was minimal.

--  D.C. Lottery is now implementing the law. It will grant licenses, without oversight, to bars and restaurants to allow gambling from 10 a.m. to 4 a.m. daily in neighborhood establishments. Patrons will be required to bring their own PC. But if gamblers become a larger share of a businesses revenue, it is possible that some of these establishments may cater to gamblers, creating what amounts to neighborhood gambling parlors. In time, it’s entirely possible that bars and restaurants will find the means to make terminals and tablets available for patron use.

-- This law will expand problem gambling. Originally, proponents said it was aimed at poker players who bet offshore.  But D.C. Lottery plans to offer bingo and slots, or an electronic version of its scratch games, as well as poker, via the Internet. Clearly, D.C. Lottery’s  intent is to expand gambling to new populations, and rake in as much revenue as possible.

-- Will gambling bring in new tax dollars? Not necessarily. Money lost to gambling is money not spent locally.

There are many other issues and implications. It is a first in the nation law and it represents a major expansion of gambling. It was a law adopted without any public input. It is a law operated without any public oversight.

The Adams Morgan ANC 1-C recently voted to ask the District Council to repeal this law.  The Kalorama Citizens Assn., voted similarly at its meeting this week.

Attend the meeting, hear the details, and decide whether this is what you want for our community.


Saturday, October 22, 2011

Adams Morgan ANC opposes DC gambling law

The Adams Morgan ANC (1C) voted this month to oppose the District’s Internet gambling law.

I attended the meeting and had been waiting for the official resolution before publishing something but don’t have it yet. The measure, which ask the District Council to repeal the law,  was approved by voice vote. One commissioner abstained for reasons that weren’t stated.

The repeal proposal was led by Martis "Marty" Davis (1C-02) who chairs the Public Service and Environment Committee.

At the meeting, Davis said the plan to have Internet gambling in the District hadn’t been vetted or thought out very well.

“This is a formula for foolishness,” said Davis of the law.

From the discussion, it appeared the leading motivation for opposing this law was around the process that led to its adoption, namely the lack of hearings and committee review. The Internet gambling law was included as a budget rider and approved last December without hearings.

Commission Chair Wilson Reynolds (1C-07) believes the law will not be repealed by the council. He argued for an alternative approach. “Control this,” said Reynolds, “and restrict this to hotels.”

Reynolds had previously raised the argument at public service committee meeting that the best approach would be approve a resolution to limit gambling to hotels of 100 rooms or more.

Davis believed the hotel restriction would break down over time.

The public service committee and the ANC offered me ample opportunity to make a case for opposing this law, and I’m grateful to them for it. But, honestly, it didn’t take much argument. It seemed apparent that the commissioners had many questions about the law and the changes it might bring to the neighborhood.

Friday, October 21, 2011

Information Fact Sheet Supporting Sample Repeal Resolution


A.  What Is Internet Gambling and How Did It Become DC Law?

  1. Internet Gambling or Igaming is gambling on a DC owned website to play games of skill and chance and to buy lottery tickets. 
  2. The District of Columbia Government with its full faith and credit is the first government in the US to support, own and operate Internet gambling.  Internet gambling has been through private companies usually operated offshore. 
  3. In 2008 the Chief Financial Officer issued a competitive bid for a new contractor for the regular lottery.  That process took over one year.  Unknown to the public, almost all of the Council Members and even the losing bidder, GTech, the winning team was awarded a contract with an option for a computer platform to include online gambling in March 2010.  DC did not even have a law allowing online gambling when the contract was signed.   
  4. Nine months later, a City Council Member inserted legislative language which allows any type of gambling into the December 2010 Budget Supplement.  There were no hearings with any public comment. The budget supplement was signed by the Mayor in January 2011.  It then went to Congress as the entire budget supplement and since there were no Congressional objections Internet gambling became DC law in April 2011. 
  5. All decisions about what games are offered are being made by two DC Government officials—Dr. Natwar Gandhi and Mr. Buddy Roogow.  There is no longer a board of directors or member appointees to the DC Lottery Board.  It is run by the executive director, Mr. Roogow who makes $157,000 per year.  Mr. Buddy Roogow lives in Maryland and told the media that he has no intentions of moving into DC.  The DC Lottery is an independent agency and the executive director does not have to live in DC.
  6. The contract was won by DC09, a DC LSDBE company which was formerly Veterans Service Corporation of Virginia.  The CEO of DC09, the majority contractor is Emmanuel Bailey who also lives in Maryland.  The winning subcontractor providing the trademarked platform is Intralot, a foreign company headquartered in Greece

B.  What Games Does the DC Internet/Intranet Platform Provide?

1.       The contract signed with DC09/Intralot includes an Intralot owned B-ON™ platform capable of:   1. On-line Lottery games 2. Interactive Lottery games 3. Numerical games 4. Instant ticket games 5. On-line interactive fixed-odds betting 6.  Fixed-odds betting 7. Live betting 8. On-line interactive casino games 9. Table casino games 10. Video Lottery games 11. On-line skill games 12. Betting exchange on skill-based entertainment games 13. Instant tickets with skill-based entertainment games. 
2.       On April 21, 2011 Mr. Roogow testified at the Lottery budget hearings before the Council that the online gambling would start with Texas Hold Em Poker, Victory at Sea and bingo.  Within two months in the June 17 DC Register and at the June 29 Roundtable, Mr. Roogow announced that the online gambling supported and operated by the DC Government includes the additional games of random number generated games (slots), blackjack and electronic instant tickets.
3.       Mr. Roogow states that DC will not go into the business of casino gambling.  But there are no laws or legislative history which prevents Gandhi/Roogow from doing this according to legal opinions provided by their lobbyist in January 2010 as long as it is INTRASTATE.

C. How Will It Work?

1.       In order to comply with federal law all players will have to play inside the city limits. This is the key to whether or not this type of gambling is legal according to testimony given by DC Attorney General Irvin Nathan.  DC Attorney General Irvin Nathan also stated that he is keeping the Department of Justice informed of the implementation planning.
2.       When a player logs into the DC website the IP address will indicate the location of the laptop or computer within one or two blocks according to Mr. Roogow.  The DC Lottery states that they will create a buffer around the District lines to prevent anyone using a wi-fi router at home to play whose laptop is in Maryland or Virginia. They may black out one to two blocks at the District line to prevent out of state users. 
3.       All players will have to be over 19.  According to several interviews given by Mr. Roogow and the DC Lottery web page they will use several filters to determine the age of the gambler.
4.       The person playing will purchase a debit card for $250 or less and start playing on a weekly basis.  It is not clear if the money escrowed will be controlled by DC09, Intralot or directly by the DC Government.  It is assumed that it will be controlled by the DC CFO’s office.  This amount is arbitrary and can be changed by Mr. Roogow any time. 
5.       The first roll out includes computerized slots.  The difference between a computerized slot and video computerized slots which were stopped by Dorothy Brizill, of DC Watch and others twice in the past is difficult to describe.  The video slot is a computerized specialized piece of equipment which was to be purchased by the owner of a casino.  At this point it is not anticipated that this will happen but it is allowed by the December 2010 law as long as it complies with the federal law known as the Johnson Act.  Video slots have only one purpose and are not manufactured within the City limits.  On the other hand someone’s laptop has many purposes and is usually purchased by the owner.  It is the laptop which will be registered along with its owner with the DC Lottery. 

D.  What Are the Expenses And Economic Issues?

1.       DC09 and Interlot are paid a fee just to implement the regular lottery system which was budgeted at $33 to $38 million over 5 years.  DC09/Intralot will also share in the profits of online gambling. “Profits” for the DC Government to share are made when many people lose money.   There are also public documents which indicate that DC Lottery may be paying additional costs once the online portion of this contract goes live. 
2.       All of the financial indirect impacts have not been considered and planned for and affected agencies have not signed off.  The hours of operation are until 4 AM every day.  DC agencies such as the Alcohol Beverage Control Administration, the MPD, or addiction treatment centers have not estimated their financial costs.   
3.       THE REVENUE ESTIMATES PER YEAR ARE NOT INCLUDED IN THE DC BUDGET BY THE CFO FOR FOUR YEARS. 
4.       The CFO could not provide reliable information and used only foreign government historical financial information to project the revenue because this is the first time a US government is running this type of business. Therefore, there could be no reliance on the projected income of about $3 million per year.
5.       As stated the additional direct expenses are also unknown.  One clue might be picked up on the DC Lottery web site which states they have retained the services of IBM Managed Security Systems to prevent national and international hacking of the DC Government site.  The DC CFO, Lottery Director, Chief Technology Officer, City Administrator and DC Attorney have been asked for the policy and procedures which will be followed should there be any successful compromises to the system.  No response has been given. 
6.       The impact on the retail regular lottery stores is unknown.  It is unclear at this point but the DC Register seems to indicate that this new system is offering the ability to buy online lottery tickets.  Further, there may be problems with retail stores becoming “hotspots” such as a mini market which currently sells liquor and will be setting up tables/chairs to allow clients to sit down with their laptops and gamble.  There may be issues requiring liquor license amendments, zoning and fire safety inspections and parking enforcement. 

E.  Where Will Players Be Allowed to Play and Where Will “Hotspots” Be Located?

1.       The home part of the system is on track and will be operational in October 2011 according to the Lottery website.
2.       After complaints at the June 29 roundtable the Lottery issued rules giving ANC’s 60 days notice to comment on proposed “hotspots.” 
3.       “Hotspots” are secured sites where it seems that terminals will be supplied.  It might be a secured site in a business which already has a wi-fi website such as certain well known coffee shops.  A player will go into this “hotspot” with a laptop or iPhone and be able to connect to the Igaming site owned by the DC Government and start gambling.  No one knows where these sites will be but this is totally controlled by Dr. Gandhi and Mr. Roogow.
4.       Federal government employees will not be allowed to play on this website. The law requires that no lottery activities including advertising can take place in the federal enclave.  Some interpret the governing law to mean any federal building.  For example, US Homeland Security is on Massachusetts Avenue near American University in Northwest surrounded by residential zoning.  Mr. Roogow told an editorial board member of the Washington Post that they will build buffers around federal government buildings.  It is envisioned that a one or two block dead zone will be created around such buildings. 
5.       At the roundtable on June 29, Mr. Roogow confirmed that it was possible to have gambling in a room in the Wilson building and an article appeared in the Washington Post that this could be true of DC libraries.  The DC Intranet website or DC H-Net which DC taxpayers have paid millions to build will be used by the Lottery to run the gambling site.  There is no legislation or legislative history since there has been no hearing that requires the DC Lottery to exclude libraries, recreation centers and schools which are hooked up to this Intranet system.  It stands to reason that these entities will be excluded but this is all up to Mr. Roogow and Dr. Natwar Gandhi

F.  Is Home and “Hotspots” Online Gambling A Good Idea To Be Implemented by 2011?

  1. A number of our District elected officials are now under investigation for ethics violations, corruption, and possible criminal activities.  The process by which Online/Intranet gambling/Igaming with computerized slots was adopted in the middle of December without any public sunshine contributes to the negative perception among DC residents that our government is increasingly controlled by outside interest groups.  Further, should anything go wrong especially within the federal enclave it will damage our quest for DC voting rights.
  2. Mr. Roogow is promising many things like checking to see if there are particular gamblers who are addicted and blocking them.  This office has not received budget authority to hire anyone new and Mr. Roogow stated in an interview that he needs to hire an expert cyber auditor.  There is no money for this.  So this office must run the paper lottery and this new huge business line without any increased staff.
  3. D.C. Government will be the first Government in the US to operate online gambling with no rules and regulations and case law history. 

How To Get Further Information?

1.       Marie Drissel, Ward 2 prepared the Q&A and worked with several people to refine the sample repeal resolution.  Angela Christophe, Ward 4, Mike Ivey, Ward 4, Andy Litsky, Ward 6 and   Patrick Thibodeau, Ward 1 are helping to distribute the resolution and informational fact sheet. 
2.       A website/blog at Stopdcgambling.com has just been established.
3.       For any comments please email marie.drissel@verizon.net
4.       Public outreach meetings have been scheduled from August 16 until September 15, 2011 by the DC Lottery. 
5.       The first meeting is for all ANC Commissioners on August 16 from 7 to 9 PM at the DC Lottery on MLK Avenuehttp://www.dclottery.com/AboutUs/igaminginfo.aspx

 



Thursday, October 20, 2011

DC Lottery Cancels Ward 6 Home/Hotspot Gambling Listening Tour with One Day Notice


Dear Councilmembers,  

I received a call moments ago from Charles Allen in Tommy Wells' office.  He was just told that the Ward Six i-Gambling community meeting that was scheduled for this Thursday -- tomorrow -- has been moved by Buddy Roogow to next Thursday.  No messages regarding this change ever went out from the Lottery Board to any Ward Six organization -- none of the Ward Six ANC commissioners -- none of the Ward Six community listservs -- and none of the customary Ward Six websites.  

After being called on the carpet by the media for scheduling their community meetings in the middle of August and over Labor Day, once again the Lottery Board is tampering with the process that they themselves established.  If Buddy Roogow and his Lottery Board crew can't be trusted to maintain a simple schedule of community meetings, how can they be trusted to run a citywide gambling operation? Flying way under the ethics radar screen, they are either wildly incompetent or too cute by half and  boldly believe that can get away with no supervision. 

The Council needs to step up to the plate and exercise some oversight.  And while it may be fine to some that Buddy Roogow, as a Maryland resident, pays no DC taxes -- someone needs to remind him that his salary is being paid by the residents of the District of Columbia and that he still reports to the Council's Committee on Finance and Revenue.   

Sincerely,

Andy Litsky
Commissioner, ANC 6D-04

Wednesday, September 28, 2011

Primer on Internet Gambling in DC

This guide, in the form of a helpful grid, offers some of the basics on DC Internet gambling, the contracting, the time line, the cost, and who actually manages it.

Click on image for larger view, then click on it again to enlarge it.

For some, it may be easier to view this in Google Docs. To do so please go here


Tuesday, September 27, 2011

Evans seeks IG review of Internet gambling

It’s difficult to decipher where Councilman Jack Evans stands on Internet gambling in the District. He has been critical of the adoption process and has raised questions about its contracting. He wants community meetings and a public hearing on the proposal. But Evans has not come out for repeal of this measure.

Evans, however, has asked the Inspector General to review the awarding of the D.C. lottery contract of 2009, as well as the iGaming – the code word for Internet gambling – provision.

In a letter to Inspector Charles Willoughby, Evans wrote this on Sept. 6:

As we discussed in our telephone conversation last week, you stated that your office is actively investigating the awarding of the DC Lottery contract in December of 2009. You also stated that your office is considering the i-gaming (Internet gambling) option and the circumstances surrounding its passage in your investigation.
I concur that your office should include i-gaming in your investigation. 
The complete letter from Evans is available here.

Monday, September 26, 2011

ANCs at opposition to DC's gambling law

Three ANCs have, so far, passed resolutions opposing the District's Internet gambling law. They are ANC 2D, which represents Sheridan-Kalorama; ANC 6D, which includes the Southwest/Near Southeast community, and ANC 4C, which represents the Petworth area, 16th Street Heights and a portion of Crestwood. 


The ANC 1C-Public Service Committee, which represents Adams Morgan,  is scheduled to take the issue up on Wed. Sept. 28. Its action may be a prelude to consideration by the entire commission in early October. 


The ANCs don't have a lot of power and, as their name implies, they are advisory. But their members are on the front-line of neighborhood issues and they will be the ones who will be dealing directly with the impacts of neighborhood mini-casinos. 


Here is the resolution approved by ANC 2D: 
ANC 2D RESOLUTION 2011-08



Resolution Regarding Online/Internet Gambling/iGaming



Whereas the Online/Internet Gambling/iGaming, including computerized slots legislation, was inserted into the December 2010 budget without public discussion or public hearings, contrary to the principles of open and transparent government; 

and



Whereas the potential negative economic impacts associated with bringing online gambling supported and operated by the District of Columbia Government everyday until 4AM may include increased police protection, alcohol beverage control, zoning and fire safety enforcement, specialized protection against hacking of the DC Government website and its gambling site, and increased addiction treatment vastly outweigh the projected annual financial benefits to the District that might be realized by its implementation.

Now, therefore let it be resolved that ANC2D fully supports the immediate repeal of the “Lottery Modernization Amendment Act of 2010” and a moratorium on the implementation of DC Government Online/Internet Gambling/iGaming, including computerized slots, so that this issue in stand alone legislation can be thoroughly vetted in an open and fully transparent manner with proper public consideration, comments, hearings and recorded vote by the Council of the District of Columbia and approval/signature of the Mayor, and

Be it further resolved that the Chair or his designee be authorized to represent the Commission on this matter.

Attested by:
David R. Bender, Chair
September 19, 2011
This resolution was approved by a roll call vote of 2-0 on
September 19, 2011, at a scheduled and noticed public
meeting of ANC2D at which a quorum was present.

FOIA filed with Office of Small and Local Business Development Concerning Questionable Actions/Procedures in Awarding Joint Venture LSDBE Points to the 2009 Online Gaming Bidders

During the 7 hour joint Council hearing on November 24, 2009 called to order by Chairman Vincent Gray, Committee of the Whole and Chairman Jack Evans, Committee of Finance and Revenue, all joint venture bidders to the online gaming request for proposals were sworn in as witnesses.  After testimony by the winning bidder and losing bidders, the CFO Contracting Officer, Joseph Giddis also testified under oath. 

Although requested by Chairman Gray, no staff representative from the Office of Small and Local Business appeared nor did the Chair of the appointed board appear despite several calls for an appearance made during the seven hour hearing.  One of the major issues pursued during this hearing was to discover what happened within the DC Government entity, Department of Small and Local Business Development concerning all 3 teams’ application for local, small, disadvantaged or LSDBE designation.  There was not a single minute of discussion about Igaming or games of skill such as poker.  The contract was awarded on December 1, 2009 which was the first legislative session after this hearing. 

The FOIA below was filed Friday, September 16, 2011 with Robert Summers, acting FOIA officer according to a telephone call made to this office in the morning.  A copy was also send to Harold Pettigrew the Director of this office.  The FOIA officer’s position is vacant. 

Dear Mr. Summers:

Under the DC Freedom of Information Act, I am requesting the following information:

1.  Veterans Service Corporation and Veteran Service Corporation joint Venture with Intralot

A.  NIGP industry classification codes (National Institute of Governmental Purchasings Commodity Services Code) or codes relating to industry for all registration periods after 2007 to present claimed by both Veteran Service Corporation and joint venture of Veterans Service Corporation and Intralot. 
B.  The documents which support the award of NIGP industry classification codes for both Veteran Service Corporation and joint venture of Veterans Service Corporation and Intralot.
C.  All information supporting certification in any class such as disadvantaged, small business and local business from 2007 to the present for both Veteran Service Corporation and joint venture of Veterans Service Corporation and Intralot.
D.  Documents used to support ownership structure from 2006 to the present for both Veteran Service Corporation and joint venture of Veterans Service Corporation and Intralot.
E.  Documents used to support joint venture between Intralot and VSC from January 2009 to the present for both Veteran Service Corporation and joint venture of Veterans Service Corporation and Intralot.
F.  Documents supporting recertification in 2009 and 2011 for both Veteran Service Corporation and joint venture of Veterans Service Corporation and Intralot. 
G.  All employment verification of Rebecca Mattingly by both Veteran Service Corporation and joint venture of Veterans Service Corporation and Intralot.
H.  At the November 24, 2009 Joint City Council hearing at 4 hours and 22 minutes, CM Catania was told by Emmanuel Bailey, who is a principal officer of VSC, that an executed joint venture had been signed between VSC and Intralot as of the hearing date.   
I.  On November 24, 2009 Mr. Emmanuel Bailey stated that VSC would employ 71% of its employees from DC.  All documents which pertain to their promise concerning DC employment by both Veteran Service Corporation and joint venture of Veterans Service Corporation and Intralot.

2.  DC09 and Joint Venture with Intralot (Note: DC09 according to DCRA was incorporated in the District of Columbia on March 29, 2010)

A.  NIGP industry classification codes (National Institute of Governmental Purchasings Commodity Services Code) or industry for all registration periods after January 2010 to present claimed for both DC09 and joint venture of DC09 and Intralot. 
B.  The documents which support the award of Industry classification codes for both DC09 and joint venture of DC09 and Intralot.
C.  All information supporting certification in any class such as disadvantaged, small business and local business from January 2010 to the present for both DC09 and joint venture of DC09 and Intralot.
D.  Documents used to support ownership structure from January 2010 or prior to January 2010 (from November 24, 2009) to the present for both DC09 and joint venture of DC09 and Intralot.
E.  Documents used to support joint venture between Intralot and DC09 from January 2010 to the present for both DC09 and joint venture of DC09 and Intralot.
F.  Documents supporting recertification in 2011 if required for both DC09 and joint venture of DC09 and Intralot. 
G.  All employment verification of Rebecca Mattingly by both DC09 and joint venture of DC09 and Intralot.
H.  At the November 24, 2009 Joint City Council hearing at 4 hours and 22 minutes, CM Catania was told by Emmanuel Bailey, that an executed joint venture had been signed between DC09 or possibly VSC and Intralot as of the hearing date.  All documents verifying this joint venture and certification received by this office. 
I.  On November 24, 2009 Mr. Emmanuel Bailey stated that DC09 or possibly VSC would employ 71% of its employees from DC.  All documents which pertain to their promise concerning DC employment by both DC09 and joint venture of DC09 and Intralot.


3.  Joint Venture between GTECH and Patton/Green/Woodson/Wiggins and Digidocs 

On November 24, 2009, testimony was given before the DC City Council at  a Joint Hearing Chaired by Chairman Gray and Committee Chair Jack Evans by Doug Patton, attorney; Roderick Woodson, attorney and William Rye, Williams and Connelly concerning their experience trying to attain LSDBE certification.  Significant dates concerning their issues on the City Council hearing tape are June 26, July 16, August 3, October 13, October 27 and November 10. 

A.  All documents, decisions, electronic messages concerning the lack of award of any points to the above entities—GTECH, Patton, Green, Woodson, Wiggins, Digidocs and minutes, notes or electronic communications concerning the significant dates above.  The archived City Council meeting tape was on November 24, 2009 and the portion outlining the actions of the both the staff and board is contained in the first two hours and ten minutes. 
B.  NIGP industry classification codes (National Institute of Governmental Purchasings Commodity Services Code) or codes relating to industry for the registration period for 2009
C.  The documents which support or did not support the award of Industry (NIGP) classification codes.
D.  All information supporting or not supporting certification in any class such as disadvantaged, small business and local business from 2009 through 2010
E.  Documents used to support or not support ownership structure in 2009 and 2010
F.  Documents used to support or not support joint venture between GTECH and Patton/Green/Woodson/Wiggins and Digidocs. 

4.  Metropolitan Gaming and the Joint Venture of Metropolitan Gaming and Scientific Games

A.  NIGP industry classification codes (National Institute of Governmental Purchasings Commodity Services Code) or codes relating to industry for all registration periods after 2008 to present both for Metropolitan Gaming and the Joint Venture of Metropolitan Gaming and Scientific Games
B.  The documents which support the award of Industry classification codes both for Metropolitan Gaming and the Joint Venture of Metropolitan Gaming and Scientific Games from 2008 to 2010
C.  All information supporting certification in any class such as disadvantaged, small business and local business from 2008 through 2011 both for Metropolitan Gaming and the Joint Venture of Metropolitan Gaming and Scientific Games
D.  Documents used to support ownership structure from January 2009 to the present both for Metropolitan Gaming and the Joint Venture of Metropolitan Gaming and Scientific Games
E.  Documents supporting recertification of Metropolitan Gaming between 2009 and 2011. 

I am a citizen activist and am not doing this for any commercial use.  I am asking for a wavier of all fees. 

Should you have any questions, I can be reached on 202-xxx-xxxx. 

Thank you for your cooperation. 

Marie Drissel

Tuesday, September 20, 2011

Catholic Conference Expresses Concern

The D.C. Catholic Conference has issued a letter that raises concerns with the plan for Internet gambling.

The complete letter follows below.

September 9, 2011

The D.C. Catholic Conference expresses concern with the D.C. Lottery and Charitable Games Board’s recent proposal to offer games of skill and games of chance via the internet. I-Gaming, as it is known, will be the first online gambling program in the nation.

Games of skill and games of chance are not in themselves inherently wrong. However these games become morally problematic when they interfere with an individual’s obligations and/or deprive a person of what is needed to meet his or her needs and the needs of others. (Catechism of the Catholic Church, 2413)

If properly controlled, gambling can provide legitimate recreation for those who participate responsibly. However, gambling can also contribute to unhealthy behaviors including addiction which can lead to other societal ills. Gambling potentially threatens the common good by taking time and resources away from those who provide care and support for their children, families, and dependents.

The Church is concerned that I-Gaming may impact poor, elderly, and vulnerable people in a disproportionately negative way. I-Gaming’s implementation raises serious questions in this regard and its possible consequences should be carefully considered before it is made publicly available.

The D.C. Catholic Conference welcomes the decision of the D.C. Lottery and Charitable Games Board to hold community ward meetings to explain the proposed program in detail. The Conference urges the Board to integrate measures addressing the concerns of the community before any implementation.

The DC Catholic Conference represents the Catholic Church’s public policy interests on issues affecting the people of the District of Columbia. For more information, please contact info@dccathcon.org.

(A PDF version.)

Monday, September 19, 2011

Continued Response to Brown’s Letter to ANC’s Council Member Michael Brown Briefed all Council Members on Igaming Yet Declares He Is Not an Expert on Kojo Nnambi Show

In a letter dated September 16, 2011 to all Colleagues including ANC Commissioners concerning numerous media accounts and gross misstatements by a few vocal members of the public opposed to Igaming, Council Member Michael Brown stated: “I briefed my Council colleagues at the Council breakfast meeting prior to first reading, where members of the press were present.”

The first reading of the new Modernization law known as Igaming or Internet gambling was placed into the FY2011 Budget Supplement Support Act on Dec. 7, 2010. Brown offered the breakfast briefing as proof that the modernization law was properly vetted. There have been no public hearings, including no government officials presenting sworn testimony.

Brown appeared on the Kojo Nnambi show for 16 minutes on April 14, 2011 only four (4) months later and admitted six times that he was not an expert and did not know the answer to several key questions. At the breakfast meeting prior to the first reading the entire Council and according to him the media in attendance depended on his being a complete expert since there were no hearings and therefore no expert witnesses presenting testimony under oath.

The transcript is provided by WAMU Radio.


Question: “Where are the hotspots likely to be located? If I wanted to play poker from home, would I be able to?”

Brown Answer: You absolutely would be able to play from home. You could also play probably, I imagine, in hotels and certain restaurants downtown and some of the part of the core areas of the city. But yes, you will absolutely be able to play in the comfort of your own home.

Question: “What kinds of technological measures will the city be taking to make sure people outside the District won't be able to access D.C. online poker?”

Brown Answer: “Only because I'm not a technical engineer so I can't answer (laugh) in the kind of way you probably would like, but the technical -- technology does exist where you can keep it within the borders. Keep in mind, Kojo, people are playing online poker today as we speak and have been for the last couple of years. It hasn't -- it's not being regulated. We cannot get fees from it. Now, we can regulate it and we can get fees, so it's kind of a good, good story for the residents of the District of Columbia relative to increasing revenue.”

Question: “I'm thinking of people who live in Takoma Park, D.C. How do they know that their neighbors in Takoma Park, Md., aren't honing in on this?”

Brown Answer: “Excellent, excellent point. And that's where the technology will have to get tweaked 'cause it's not just Takoma Park on Eastern Avenue, it's also Western Avenue, it's -- all the big border streets, because within 500 feet or so, there could be some issues, but the technology people will work on it and I'm sure it will get fixed.”

No questions; continuing comments:

“We are watching just busloads of people every day going to West Virginia, Delaware, Maryland, to play other kinds of games. We had to do something here. And we're gonna put a lot of controls. We're gonna have educational efforts. The Lottery Control Board is gonna have educational efforts about the dangers of gaming. So we're gonna do everything we can to make sure that we don't hurt anybody in this process.”

Question: “And following up on that, will those entrepreneurs be able to integrate other entrepreneurs who can set up gaming facilities in their own restaurants? And what will be the process to, like, get a license to have a computer setup in your bar, for instance, where somebody can game?”

Brown Answer: “Well, I'm not sure how exactly they'll have it set up, but they -- I don't even know if they'll start with Intralot. I think they have to start with the Lottery Control Board here in the District of Columbia. That's really the overseeing body that regulates lottery and game playing here in the District of Columbia.”

Continuing comments: On the method for entrepreneurs for getting involved and getting a license

A lot of the implementation side -- my job is the legislator. I got the law passed to make sure it was legal. On the implementation side, they should contract the Lottery Control Board. They will have all the answers to those questions for him.

Sunday, September 18, 2011

A response to Brown's letter to the ANCs

The sponsor of the bill authorizing Internet gambling and mini-casinos in District neighborhoods, Councilman Michael Brown, sent out a letter Sept. 16  to the ANCs defending his proposal and correcting what he terms as “gross misstatements by a few vocal, yet misinformed, members of the public” about the plan to expand gambling in the District.

What follows is a brief summary of some of Brown’s major points in his letter to the ANCs. To see the councilman’s full letter, please go here.

What Brown claims: The councilman argues that “the iGaming provision was properly vetted through Council procedures” similar to other measures. Moreover, Brown says he briefed council colleagues at a breakfast prior to adoption and cites articles that appeared from Dec. 7 through Dec. 9, 2010, in the Washington Post, Washington Times and other publications.

Response:  The District adopted this law in its supplemental budget about two weeks after those articles appeared. That was hardly sufficient notice. There was no public hearing on this legislation or opportunity for public comment. Although this legislation had been in the works for months prior to these initial news reports, its adoption was clearly engineered to minimize public notice.  Brown has no defense here.

What Brown claims: The councilman argues that his gambling plan won’t hurt the poor. “Many have alleged that iGaming will most detrimentally affect the poorest and most vulnerable of our residents. This is not the case,” writes Brown.  In order to gamble on the Internet “a player must have a bank account, a computer and an Internet connection. Our neediest residents generally do not have all three items,” he writes. Further, argues Brown, “the limited amount of research on the demographics of individuals who play online games shows that the majority of players make in excess of $60,000/year.”

Response:  Gambling will be allowed at restaurants, bars and hotels as well as in the home.  It’s not entirely clear, based on what’s been disclosed so far, just how the financial aspects of this plan will work.  What is known is that gamblers will have to set up a gambling account and will be limited to $250 a week. They will have to use debit cards. But will gamblers be required to use a debit card that links directly to a bank account? Will they be able to purchase a debit card (think gift card) to use instead?

Brown suggests that someone who is poor may not own a computer. But why will anyone need to bring a computer to a bar, restaurant or hotel to gamble? What’s to stop a business from making computers available to patrons? The legislation doesn’t prevent a business from supplying a patron with a computer, and the DC Lottery’s  FAQ is silent on this issue.

Brown argues that online gaming attracts people with higher incomes. But he is comparing people who use offshore operations against an entirely new enterprise: A government sponsored and promoted online gambling operation.  This is not a fair comparison, and it is one of the reasons why this legislation needed far more public scrutiny than it received.

One other point: Among the games that DC Lottery plans to offer is bingo. Is this the type of game that is aimed at high-income earners or fixed-income seniors?

What Brown claims: Brown argues that the law will not lead to the creation of gambling parlors. He writes: “It has been alleged that so-called iGaming hotspots are tantamount to ‘gambling parlors’ full of gaming terminals. This is not true.”

Brown says that “there will be no gaming terminals in the District of Columbia, as this is prohibited by Federal law. All iGaming will be played on a personal computer.”

Response: There is nothing in this law, as pointed out earlier, to prevent a bar from making a personal computer or tablet available to a patron. A bar could lease or rent a PC to a customer who is then free to use it for Web browsing or for gambling. The PC isn’t being specifically supplied as a “gaming terminal,” but it could be used as one, and that is the key point.

How will gambling parlors emerge? A bar or restaurant that gets a license to offer a gambling “hot spot,” will be able to operate it from 10 a.m. to 4 a.m. each day. These businesses may begin to draw in new types of customers specifically interested in gambling. As bars and restaurants gain more revenue from gambling-focused customers, these businesses will naturally want to cater to these customers. This is how mini-casinos may emerge in neighborhoods.

What Brown claims: “I do not support any type of slot-machine gaming in the District of Columbia. I have made my position very clear to the Mayor and the Director of the DC Lottery. This legislation does not authorize the installation of any type of slot machine or gambling device in the District of Columbia.”

Response:  Brown’s statement sounds heroic, but it is a gross misstatement of the public record. The councilman already pointed out in his letter that federal law bars gambling-specific devices. What Brown fails to note is that DC Lottery plans to offer an electronic version of slots online.

Councilman Jack Evans held a public roundtable in June on the legislation. A DC Lottery official was asked about slots. The Washington Post reported:
“Do you expect to be offering slot machines?” asked council member Tommy Wells.
“Yes,” responded Buddy Roogow, the lottery chief. After a moment, Roogow added: “They do not meet the legal definition of slot machines. They are in fact random number-generated machines.”
Brown’s letter to the ANCs only adds to the case that this is a bad law. It helps to define the questions and to expose the areas that need more examination, such as whether this law will increase gambling addiction in the District.

Although the public and the ANCs were not given a chance to ask questions and express views before adoption of what is clearly major legislation, efforts to establish online gaming appear well in place.

Mayor Gray, who has been largely silent on this law, appears to be supporting it and it’s unclear whether the council’s opponents have enough votes to repeal this bill.

It’s distressing and utterly depressing that the District’s government has taken a path that will lead to no good end for District neighborhoods and its citizens.


Friday, September 2, 2011

CFO Gandhi Has the Full Power to Fold The Game

Here is the Lottery Modernization Law


The lottery language was included in the FY 2011 Supplemental Budget Support Act (B18-1100). The relevant language is below. It authorizes games of skill and chance. It is now up to the DC Lottery and Charitable Games Control Board to promulgate regulations and determine which games to offer. The independent Executive Director of the DC Lottery reports to the independent Chief Financial Officer. There is no longer a Board of the DC Lottery.

SUBTITLE G. LOTTERY MODERNIZATION ACT

Sec. 761. Short title.

This subtitle may be cited as the “Lottery Modernization Amendment Act of 2010”.

Sec. 762. Section 4 of the Law to Legalize Lotteries, Daily Numbers Games, and Bingo and Raffles for Charitable Purposes, effective March 10, 1981 (D.C. Law 3-172; D.C. Official Code § 3-1313), is amended as follows.

(a) The existing section is designated as subsection (b).

(b) A new subsection (a) is added to read as follows:

“(a) A lottery or lottery game means both games of skill and games of chance that are operated by and for the benefit of the District of Columbia by the Board; provided, that:

“(1) If the games of skill and games of chance are offered via the Internet, any technology employed for the play shall confirm the play to be at all times within the District; provided further, that the restriction shall not apply to the conduct of fantasy sports and sweepstakes-style games if such games are lawful; and

“(2) No method, media, or device for play of the games of skill and games of chance shall violate An Act To prohibit transportation of gambling devices in interstate and foreign commerce, approved January 2, 1951 (15 U.S.C. § 1171 et seq.), or any other federal law.”.

(b) A new subsection (c) is added to read as follows:

“(c) The Board, through the Chief Financial Officer, pursuant to Title 1 of the District of Columbia Administrative Procedure Act, approved October 21, 1968 (82 Stat. 1204; D.C.

Official Code § 2-501 et seq.), may issue rules to implement the provisions of this section, and may establish which games may be offered and additional terms and conditions for the conduct of the games not inconsistent with subsection (a) of this section, including the percentage of wagered amounts to be retained by the Board, minimum and maximum wagers, and time limitations for the games.”.

Definitions, timeline, and major players

DEFINITIONS:

The only RFP competitively bid by the CFO's office was for "online gaming." "Online gaming" in the simplest definition refers to the telecommunications aspects of the 400 to 600 DC lottery terminals for the purpose of purchasing lottery tickets for games of chance. It has nothing to do with Igaming. The improvements which were being sought by DC Lottery were for the regular lottery. Igaming [if in caps it is a trademarked word belonging to Intralot] or Internet gambling is totally different. In the simplest definition it refers to DC home poker/slots gambling and DC hotspots poker/slots which are games of skill and chance. This internet gambling is DC Government policy with the full faith and credit of the DC Government backing it. The home poker/slots is the first internet based gambling sponsored and run by a government in the US.

Online gaming = DC lottery terminals only
Igaming or Internet gambling = DC homes and DC designated hotspots.

TIMELINE AND MAJOR PLAYERS:

PHASE ONE -- WHAT WAS MORE OR LESS IN THE PUBLIC EYE

Online Gaming referring to the 400 to 600 lottery terminals only

2007
May competitive bid for online gaming issued, bidders
GTECH/LManning and Intralot/Warren Williams Jr/SR

Dec award to Intralot/Warren Williams Jr/Sr

2008
Jan Decision by CFO contracting office sent to CFO Gandhi for Council transmission

Apr 7 Council Hearing panelist CFO contracting officer Eric Payne, Jay
Young, interim Executive Director, DC Lottery; Ann Walker Marchant representing
her father, George Walker and in person Leonard Manning of Lottery Technology
Corporation which had partnered with GTECH challenging decision of
Intralot/Warren Williams Jr/Sr
NOTE NOT A SINGLE WORD WAS MENTIONED OF INTERNET
GAMBLING OR Igaming DURING THE THREE HOURS OF HEARING

Oct CAB ruled on LTE challenge of GTECH plus LTE without merit

2009
Jan Eric Payne, former CFO contracting officer fired now suing DC Government

Unkn Contract rebid respondents, 1. GTECH with Patton, Green, Wiggins, Woodson and
Digidocs; 2. Scientific Games with Hopkins (Metropolitan Gaming) 3. Intralot
with no partner

Nov 24 (Correction: initially this date was listed as Nov 19) Seven hour hearing by contractors attacking the process. At this hearing irregularities were discussed about lack of LSDBE designation of the GTECH group and the final points given to Scientific Games with Hopkins which were described as lower then it should have received. At this hearing Emmanuel Bailey represented Veteran Service Corporation as a majority interest with Intralot
NOTE NOT A SINGLE WORD WAS MENTIONED OF INTERNET GAMBLING OR Igaming DURING THE SEVEN HOURS OF HEARING

Dec 1 City Council vote, Mendelson no; Gray/KBrown abstain; Bowers
present, MBrown, DCatania, JEvans, JGraham, MCheh, HThomas, TWells,
YAlexander, MBarry yes
Discussion included the fact that VSC was now part of the contract but there
was no evidence that the joint partnership had received a LSDBE designation and
no evidence that a contract had been signed by the parties
NOTE NOT A SINGLE WORD WAS MENTIONED OF INTERNET
GAMBLING OR Igaming DURING THE 15 MINUTE DISCUSSION

PHASE TWO -- WHAT WAS NOT IN THE PUBLIC EYE

Igaming or Internet Gambling [B-ON™ Intralot platform]

2010
Jan to March extensive email traffic showing CM Michael Brown or his staff
assisting in the negotiations with CFO’s office and Intralot and DC09 a totally
different platform, B-ON™ aka Igaming, Internet gambling in DC homes and DC hotspots

Mar 29 DC09 is incorporated in DC; do not know if the joint venture was given
a LSDBE (will research within one week)

Mar 31 contract between DC09 as majority stock holder and Intralot is signed by
CFO or CFO's contracting officer to include B-ON™ or Igaming. Council never
heard a single word about this proposal. It is significantly different from the
competitive bid.

Dec Lottery Modernization language is placed into the FY2011 budget supplement
by CM Michael Brown and Council votes twice on the budget supplement. No one
voted against the Modernization language but 2 or 3 Council Members voted
against the budget supplement due to tax abatement issues. This language allows
all types of gambling in DC with little to no restrictions except that it states
that it cannot violate federal laws

Dec GTECH one of the losing bidders issues a press release that this language is a
totally and completely different platform then what was requested and
competitively bid on by the CFO's office

PHASE THREE -- WHAT RETURNS MORE OR LESS TO THE PUBLIC EYE

2011

Jan Mayor Gray signs FY2011 Budget Supplement

Apr Congressional review period ends and Lottery Modernization becomes DC law

Apr Tom Sherwood reports that internet gambling is law on NBC

Apr 19 at the regular budget hearing on next year's budget Buddy Roogow,
executive director of the DC Lottery states that they will be offering poker, Victory
at Sea and bingo. No mention is made of computerized slots. He also does not ask
for a single increase in staffing nor any specialized experts such as a cyber auditor.
This is significant for many reasons.

Jun 29 Roundtable (not hearing) is held by Council Member Jack Evans with no
government witnesses sworn in. DC Attorney Irv Nathan states that the
implementation plans comply with federal laws Buddy Roogow when asked
describes that the DC Wilson building could in concept have a gambling room
downstairs and that it does include software for computerized slots (not video
computerized slot machines). He also reveals that there will be hotspots and that
that these games will be offered in homes. ANC's were not given great weight and
the 20 -30 hotspots were not named. (ANC’s will now be notified of potential
hotspots with 60 day notice.)

Jul Senators Reed and Kyl issue letter to US Attorney Eric Holder stating that
internet gambling is inherently interstate and is against the law to include intrastate
gambling.

Draft prepared by Marie Drissel, September 1, 2011