Intralot Pays D.C. Council $500,000 for Gambet Super Bowl Outage
On Super Bowl Sunday this year, perhaps the most prominent sports betting day in the post-PASPA era, sports bettors in Washington D.C. were left in the dark as GambetDC underwent technical difficulties and was inoperational. In most states, this wouldn’t have been an issue with several platforms to choose from, but D.C. has an effective monopoly with GambetDC, and that situation has created several problems for the market.
Intralot Ponies Up $500,000
At a D.C. Council meeting last week, Lottery Executive Director Frank Suarez shared the news that the D.C. Lottery had received $500,000 from Intralot, the provider of the GambetDC mobile application, for the Super Bowl outage. The outage reportedly stemmed from Intralot’s failure to secure approval from Apple in a timely matter before the Super Bowl. Essentially, due to the company’s lack of foresight, D.C. missed out on thousands of dollars of potential revenue.
The $500,000 payment from Intralot was agreed upon to cover the day’s worth of potential bets lost (estimated at $65,000), a free-bet promotion offered to assuage frustrated customers ($6,300), and marketing costs to help repair the company’s damaged reputation ($428,700). Suarez noted that his team was “very satisfied with the end result” despite the difficulties associated with measuring “reputational damage.”
Gambet Taking a Toll on D.C. Market
On March 3, Martin Austermuhle, a reporter and editor for WAMU 88.5, wrote a thread on Twitter detailing Suarez’s conversation with the D.C. Council. Suarez was adamant that “the idea that multiple providers is the thing that’s going to drive up the revenue is not really proven,” and he was unwilling to agree that Gambet had “underperformed.”
However, D.C. Lottery officials admitted that Gambet had cost D.C. $4 million in its first year of operation. In other words, D.C. lost money in its legal sports betting market, unlike other states, which have made millions of dollars. D.C. only has a population of about 700,000, but it should still be able to generate tax revenue from its sports betting endeavors.
After some back and forth with McDuffie, D.C. Lottery officials admit that the city's sports-betting app *cost* D.C. $4 million in its first year of operations. As in, it not only didn't make money, it actually cost the city money.
— Martin Austermuhle (@maustermuhle) March 3, 2022
The Future of Gambet
Since its launch in March 2020, GambetDC has drawn scathing reviews from sports bettors frustrated with a poor user interface, unresponsive customer service, bad odds compared to national sportsbooks, and overall technical issues. At the moment, GambetDC has an average review of 1.5 stars on 462 ratings on the Apple Store.
Nonetheless, the District seems content to continue with GambetDC as the sole provider in the market for the time being, with Suarez promising a “complete revamp and overhaul of the interface for players.” GambetDC expects to be able to add the ability to cash out bets and boost functionality across the board.
Last month, Suarez told the D.C. Council that he expects Gambet DC to bring in $1.5 million in tax revenue. That is just 7.5% of the $20 million lawmakers were told was possible when they agreed to the contract with Intralot to be the sole provider in the market. GambetDC made no money in 2021, and while brick-and-mortar sportsbooks have outperformed expectations, these estimates are disappointing.
Suarez assured lawmakers that GambetDC posted its best month in March with $6.2 million in total bets, a 62% year-over-year increase. Still, patience is wearing thin as the market has yet to come close to the success promised by Intralot when the contract was agreed upon. Suarez’s commitment to GambetDC aside, the concern among D.C. Council members is rising that it could be better off with a market with open competition among operators.
Looks like things are improving at @GambetDC pic.twitter.com/G0x7Ajz3yL
— Matthew Waters (@ByMatthewWaters) April 11, 2022