THE BLOG

Online Gambling: A Good Bet for D.C.?

11/14/2011 10:09 pm ET | Updated Jan 14, 2012

What's your iGame -- Texas Hold'em Poker, Black Jack, Bingo? Or maybe it's E-Scratch, a virtual way to scrape your way to winnings.

If you live in Washington, D.C., this may not just be an "iDream" and you could soon be living in the first jurisdiction in the country to allow iGaming. But it may not be a done deal, although it was part of D.C.'s Budget Support Act passed in late 2010. The iGaming provision was the brainchild of D.C. Councilmember At-Large Michael A. Brown, as a budget enhancer he projects will bring in $13 million over the first four years.

So what exactly is iGaming? Very simply, it's internet gambling. According to the D.C. Lottery Commission, which would oversee D.C.'s iGaming, the internet is used to "wager money on games of skill or chance... and fixed odd games." That includes the very chancy virtual E-scratch. In order to iGame, you have to be at least 19 years of age and be within city limits.

Online gambling also means no casinos blighting the nation's capital's cityscape. Instead, people can gamble in the privacy of their own homes or in "Secure Commercial iGaming Locations (SCILs)," located in existing commercial establishments, such as hotels, coffee shops, bars and restaurants. In other words, to get a license, a business has to already be in operation. Theoretically, a SCIL could be in a gas station or a gym (gamble while you're on the treadmill!).

Viewed by iGaming proponents as a possible revenue-raiser for a city with struggling schools and social services, the law has met with vociferous opposition over questions of who the internet gambling revenue will actually benefit, local authority over the location of online gaming sites, and challenges over the process of enacting the iGaming measure, the "Lottery Modernization Amendment Act of 2010," into law. According to opponents, it was slipped into the D.C. budget bill at the end of last year without public hearings.

But is the "Lottery Modernization" law really just a way for D.C. to get an online seat at the gambling table? Desperate for revenue, many states are exploring iGaming as a budget-booster, so D.C. is not alone. But how much is the take for the vendors, which, in D.C.'s case, is "DC09 LLC," a joint venture between Intralot, an integrated gaming supplier based in Greece (currently the world's most notorious debtor nation) and the D.C.-based Veterans Services Corporation (VSC).

According to Gabrielle Barry, Chief of Marketing & New Products for the D.C. Lottery, net
iGaming revenue is split 50/50 between the D.C. government and DC09, with DC09
responsible for implementation and operating costs. David Umansky in the office of D.C.'s
Chief Financial Officer said that means D.C. will be splitting an estimated $26 million over
four years with DC09, with Intralot paying all program expenses.

And who would benefit from the iGaming revenues? Opponents aren't convinced it would be social programs. As a result, activists created Stop D.C. Gambling, a blog to educate D.C. residents about the law's flaws. Meanwhile, local iGaming advocates believe online gambling revenue will fix the schools, create jobs and help human services programs, even though the gambling funds go into D.C.'s general fund, and are not dedicated to education or social programs.

"Anything that brings revenue into the city is a good thing," said a man at a recent evening public meeting, one of the last in a series being held in the District's eight wards. In opposition, a woman vocalized others' concerns asking "how do we know where the money will go?"

Generally, supporters of iGaming in D.C. stress that gambling goes on regardless, only outside of the District, depriving the city of revenue. A woman with parents in their 70s who drive outside of Delaware to gamble and don't return until five in the morning, would rather have them iGaming at home.

Others see bringing iGaming into trendy commercial areas like Adams Morgan as dangerous, with the potential of mixing alcohol and gambling, a fear Councilmember Brown rebuffs because there is no cash involved. Some who oppose iGaming are appalled at the legislative process creating the online gambling law. Brown disputes that as well claiming in a "Dear Colleague" letter that "the iGaming provision was properly vetted through Council procedures ..." Since being enacted, D.C. Council members Tommy Wells and Phil Mendelson have sponsored repeal legislation while other local officials have backed off from their support of the law as passed. Some local community bodies are also calling for repeal.

Buddy Roogow, executive director of the D.C. Lottery Board says "It's here, it's happening."

Wanna bet?