Saturday, January 21, 2012

Here's what they didn't share about D.C.'s plan

“You're all late for tea!” --  Says The March Hare, as he throws his teacup in the movie version of Alice in Wonderland.

The Washington Post headline today about the D.C. inspector general report on Internet gambling reads as if the District was exonerated for its handling of this issue.

“No legal, ethical wrongdoing in D.C. Council lottery, inspector general concludes,” writes The Post.

This headline is discouraging and there are worries that it might settle the thinking on this issue.
“It needs to be purified by someone with evaporating skills, or it will fester and putrefy,” said the Mad Hatter.

Indeed. There are things that have happened that people don’t know about, and here’s the biggest one of all: On March 30, 2010, the District signed a contract with its gaming contractor, Intralot that outlines, in great detail, Internet gambling in D.C.

It was kept quiet. Had people known about this contract, the entire history would have been different.

Consequently, we were all late for the tea party that came ten months later.  This was in December, 2010, when D.C. Council approved Internet and neighborhood gambling in DC, without so much a word from the public.

The council members supporting this contract decided that the best thing, from an ethical point of view, was to not bring this to the public’s attention.

This contract was a platform for debate, a debate this community was not allowed to have.

But the public was denied its voice ethically, the IG points out.

What was not seen or heard

The “scope” of the contract included development of a “game management system incorporating internet lottery and scratch games as well as poker, bingo and backgammon interactive game engines.”

Let’s look at some of the most wondrous issues.

College students, the young, it’s all money

Since D.C. will have one of the lowest legal casino betting ages in the country, 19, young people will be a lucrative target market.

To accommodate this age group fantasy leagues will be offered, and games like “Super Goal,” which is a virtual shoot out of a soccer featuring realistic representations of two teams. The betting aspect involves around such things as picking the final score of the game, and picking the total number of goals achieved by both teams, according to the contract.

Another youth oriented game is “Naval Attack,” which sounds lot like Battleship. Players win by picking various outcomes, such as the exact number of ships hit by bombs.

Not just homes, bars and restaurants but mobile, too.

The contract authorized “Internet player membership” that “authorizes a customer to play interactive games over internet and optionally mobile channels.”

When did the District government decide that gambling should be available on “optionally mobile channels?”

Hopeful thinking credit card provision

The contract allows payment through “bank accounts, debit cards, and/or credit card.”

Everybody wins!

What this contract describes is gambling ecosystems where people not only gamble online, but also connect with third party merchants through advertisements.

Since the District’s plan also calls for the creation of physical casinos in bars, restaurants, hotels, coffee shops and other establishments, these establishment can then, in turn, advertise gambling promotions on the player portal, such as free drinks for gambling.

The D.C. Office of Casino Boss

The competitive issues are staggering. Here we have a government agency, D.C. Lottery, going into the casino gaming business, accepting third party advertising, and then pitting neighborhood casino “hot spots” against bars and restaurants that don’t allow gambling.

Should Internet gambling have been a separate bid?

The Post reports that the IG criticized the CFO’s office for “adding Internet gambling provisions to the contract without issuing a written notice that the underlying contract requirements had changed an allowing another round of bids from interested companies.”

“Because of this,” The Post reports, the CFO “may not have received the best price for the District.”

“That is an excellent practice,” said The Mad Hatter.

It’s hard, from the contract, to tell exactly who makes what. But it does include this provision: Intralot will be compensated at 50% of the Net Gaming Revenue … (see page 18 on the PDF).

What is clear is that if the District had sought new bids for its plan to allow people to gamble from their homes and from neighborhood bars and restaurants, the public may have learned what’s up.

Instead, the gambling issue was pushed down a rabbit hole.

“Who's to say what is "proper"? What if it was agreed that "proper" was wearing a codfish on your head? Would you wear it?” said Alice.

A PDF of the contract

DC Lottery Contract March 30 2010

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