Intralot, a Greek company that offers a variety of gambling and sports betting services, received a $215 million contract to provide sports betting to the city of Washington D.C. last month. As reported by the Washington Post, the company will be responsible for half of the work needed to introduce sports gambling to the city, while maintaining the existing lottery system. The only problem: Intralot has given this responsibility to a firm that doesn’t have any employees.

Adhering to the Law?

The law within the nation’s capital requires companies with large public contracts to subcontract work to small local businesses. In doing so, large companies would help boost the local economy and create jobs for local residents. Intralot chose a company they partnered with on a previous deal that gave them the power to run the lottery within the capital, but this choice has been the source of speculation about whether or not local businesses and residents would be benefiting at all.

Earlier this summer Intralot confirmed that the firm Veterans Services Corp. would be responsible for providing all of the resources needed to fulfill the terms of the contract. The new deal was awarded without a traditional bidding process, which raised a few red flags for an agency that has no employees and has listed executives on their website who do not actually work there. Emamanuel Bailey leads Veterans Services Corp. and is a resident of Maryland, not Washington D.C. In order to adhere to the law, the company was registered at the home of his 75-year-old mother in D.C. Bailey’s mother is also a majority shareholder of the company.

Questionable Political Ties

In addition to these concerns, other media outlets have suggested that Bailey’s political connections have played a hand in the awarding of the recent sports gambling contract. Councilmember Jack Evans originally pushed for sports betting within the nation’s capital and is now being investigated by the FBI for possible ethics violations. Other subcontractors linked to the Intralot deal have close ties with a number of other politicians. These connections motivated council members Robert C. White Jr. (D-At Large) and Elissa Silverman (I-At Large) to call for a close examination of Intralot and Veterans Services Corp.

Further Complications

In response to concerns surrounding Veterans Service Corp.’s ability to effectively handle the contract, Intralot officials said that the work could be completed by DC09, another company that was formed in a joint effort by Intralot and Veterans Services 10 years ago. The link between the companies only furthers the confusion surrounding the deal, as Veterans Services owns 51 percent of DC09, while Intralot funded the creation of DC09 and is in control of the company, as found by The Washington Post. It is also worth noting that Bailey’s compensation over the past five years has not come from Veterans Services Corps, but DC09.

DC09’s headquarters are legitimately based in Southeast Washington, but the confusion surrounding the connections between the companies and political figures seem to discredit this fact. Additionally, no formal mention of DC09 was made in the initial plan that Intralot submitted to district officials earlier this summer. Bailey’s comments to The Washington Post, referring to Veterans Services as “a case study” for the small-business program, hardly eases any of the concerns that have been raised thus far, and the deal must now stand up to the formal probe launched by council members in Washington D.C.