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Craig Hudson

Well after closing time, the staff at Abunai, a poke restaurant in Northwest D.C., grew accustomed to leaving on the lights for a single customer. It had good reason to treat this 27-year-old former data scientist so well. His patronage brought in well over $100,000 — despite him rarely ordering anything to eat or drink.

“I don’t even like raw fish,” he said.

What drew him to the 15-seat establishment on L Street were the two sports betting kiosks run by GambetDC, the District’s government-sponsored sportsbook. The bettor had discovered that the oddsmaker used by GambetDC regularly set betting lines that deviated, sometimes significantly, from those offered at the savviest national sportsbooks.

Exploiting such differences is one of the easiest ways for sports gamblers to make money — and one of the fastest ways to get restricted on how much they can bet. Many of the country’s top operators aggressively limit how much customers can wager after they show winning tendencies — and this bettor said he was limited on GambetDC’s app.

But at GambetDC’s kiosks, customers don’t have to identify themselves, or even create an account, to wager. So this bettor made thousands of bets at the sushi restaurant, wagering more than $1 million, a conservative estimate based on records provided by the bettor, the restaurant and the D.C. Lottery.

Then in early June, he received a letter from the director of the D.C. Lottery’s Regulation and Oversight Division informing him that he would no longer be allowed to wager more than $60 per bet at any of the District’s approximately 70 locations with sports betting kiosks. He appealed, but before he could have his hearing, the D.C. Lottery issued a little-noticed change to its policies in late June.

“Emergency action is necessary to promote the immediate preservation of the health, safety, and welfare of District residents,” the <a href="https://dcregs.dc.gov/Common/DCR/Issues/IssueCategoryList.aspx?CategoryID=28&IssueID=1041" target=_blank>Lottery said</a>. “In order to curb excessive wagering and ensure responsible play at retail locations,” any individuals found to be spending a lot of time or money at the kiosks or placing many wagers in a short period of time could be limited in how much they could bet.

The Abunai gambler, who said he had profited more than $100,000 through his bets at the restaurant, not only had provoked city officials to limit how much he could wager in the District. He had prompted them to change the process by which anyone could be limited.

The Lottery declined to make any officials available for interviews. In response to emailed questions from The Washington Post, the Lottery said, “The emergency rulemaking action was in part motivated by the recent observation of a GambetDC player that appeared to be frequently placing an unusually high number of wagers and wager amounts at retail.”

The rule change could further weaken the city’s sports gambling operation, with some retail partners concerned about the implications for their businesses. And the episode provides a window into problems that have plagued Washington’s operation since its launch, according to observers of the D.C. betting scene: unsatisfied customers, unhappy partners in the restaurant business, uninspiring returns for the District government, perplexing decisions and a minimal response to public health concerns.

“It’s pretty safe to say this has been the worst rollout of legal sports betting in the United States,” said Dustin Gouker, a veteran of gambling media and a former correspondent for The Post. “It is the punchline of a joke at this point.”

The tactic taken by the Abunai gambler — who spoke to The Post on the condition of anonymity to avoid the scrutiny of other sportsbooks — does not seem to have been widely imitated by other customers at other establishments. GambetDC kiosk licensees earn a 5 percent commission on bets placed, regardless of whether they win or lose, and Abunai’s haul is more than any other local business has made off sports gambling, according to records provided by the Lottery.

Officials identified this gambler, he said, when he went to the Lottery Prize Center to cash out high-value tickets. They also once sent an investigator to a kiosk to confront him in person, he said.

The impact of new policies showed up in government reports. GambetDC users <a href="https://dclottery.com/about-us/newsroom/dc-lottery-sports-wagering-monthly-report-august-2023" target="_blank">wagered $5.4 million</a> in June. By July, the number was down to $3.1 million, and by August, it was $3 million. There’s typically a drop between those summer months, but this year’s 45 percent decrease from June to August was far larger than a 9 percent decrease <a href="https://dclottery.com/about-us/newsroom/dc-lottery-sports-wagering-monthly-report-august-2022" target="_blank">in 2022</a>.

John McDonnell

In 2019, amid the national rush for states to set up sports betting operations, the D.C. Council gave the Lottery near-total control over online and in-person sports betting within District lines and awarded the Greek gaming company Intralot a five-year, $215 million no-bid contract to run GambetDC. Advocates for the deal argued that skipping the usual bidding process would allow for a quick rollout and give the District a head start competing for local customers with Maryland and Virginia, both of which had yet to legalize sports betting.

Before the Council approved the contract, The Post<a href="https://www.washingtonpost.com/local/dc-politics/most-of-the-districts-215-million-sports-gambling-contract-to-benefit-political-insiders/2019/06/28/ff0ebf58-9928-11e9-830a-21b9b36b64ad_story.html" target="_blank"> reported</a> that many of Intralot’s subcontractors had little experience with sports betting but extensive ties to City Hall. The Council approved the deal in a contentious 7-5 vote.

“We were sold a bill of goods about how we had to hurry up and this was the only way to do it,” said former council member Mary M. Cheh (D-Ward 3).

After assurances that GambetDC’s accelerated rollout would give the District a competitive advantage, D.C. bettors never took to the app. Along with its clunky interface, GambetDC imposes a “vigorish” — the sportsbook’s advantage baked into its odds — that’s roughly twice the industry average, according to the prices posted on GambetDC and other sites. “I tell any sports bettor to never use Gambet,” said Matt Phillips, a local betting analyst with Next Level Sports and Entertainment. “It’s not beneficial if you want to win money.”

Asked to respond to questions, Intralot provided a statement that said, in part, “We pride ourselves [on] creating a fun and entertaining sports betting experience for our players across the District.” Regarding criticism of odds that put customers at an exceptional disadvantage, the statement said, “GambetDC’s pricing strategy is designed to be always competitive and at the same time generate revenues for the District.”

Former council member Elissa Silverman (I-At Large), who voted against the Intralot contract, said people tell her D.C.'s app is so disappointing, they plan their betting around <a href="https://www.washingtonpost.com/sports/2022/11/08/escape-dc-betting-app-some-frustrated-sports-gamblers-head-virginia/" target="_blank">excursions out of the city</a>; one person bets when shopping at a Home Depot in Virginia, another wagers when a child has swim lessons in Maryland.

To escape D.C.’s betting app, some frustrated sports gamblers head to Virginia

Council Chairman Phil Mendelson (D), who voted for the deal, said he also has heard of D.C. residents crossing state lines to bet. “It’s almost as if the operation has created self-harm,” he said.

Some say GambetDC’s prices take advantage of inexperienced customers who don’t realize they’re getting ripped off. Christopher Bennett, sportsbook director at Circa Sports in Las Vegas, expressed disbelief at GambetDC’s prices, saying a high vigorish is self-defeating if it drives away too many customers.

“I’m not saying everything that’s done in Nevada is the best way to do it,” Bennett said, “but it’s been insulting to see what some of the other jurisdictions are doing.”

Steeper odds could also accelerate how quickly gamblers find themselves in trouble. Cheh and Silverman said before legalizing sports betting, the Council spent little if any time weighing the public health consequences.

If they don’t cross District lines, Washingtonians can bet through the big private operators only at professional sports venues — FanDuel at Audi Field, Caesars at Capital One Arena or BetMGM at <a href="https://www.washingtonpost.com/sports/2023/04/14/nationals-park-dc-guide/" target="_blank" class="contextual_link">Nationals Park</a>. Otherwise, GambetDC is basically the only game in town. Still, it has fallen tens of millions of dollars short of<a href="https://www.washingtonpost.com/local/dc-politics/sports-gambling-will-earn-dc-20-million-less-than-projected-officials-say/2019/06/26/b1b67956-9826-11e9-916d-9c61607d8190_story.html" target="_blank"> revenue projections</a>, adding just $2.7 million to the District’s general fund last fiscal year, <a href="https://cfo.dc.gov/sites/default/files/dc/sites/ocfo/release_content/attachments/OLG%202022-2023%20Performance%20Oversight%20Hearing%20Testimony%20Slides.pdf" target="_blank">according to the Office of Lottery and Gaming</a>.

“Nobody uses that app,” said Joe House, a D.C.-based attorney and sports betting commentator on the Ringer podcast network. He said he bets at Capital One Arena, near his office, or drives to a church parking lot in Virginia to wager on his phone through FanDuel. After trying GambetDC’s mobile offering, House said, “I’m out forever.”

The Abunai gambler, though, discovered an exception. As bad as GambetDC’s standard prices are, its oddsmaking is often worse. Alex Monahan, co-founder of the odds tracker OddsJam, said D.C.’s sportsbook has “approximately three times as many inefficiencies” in its odds compared with national operators. In other words, a savvy customer could win frequently enough to overcome GambetDC’s hefty house edge.

Intralot, which also operates government-run sports betting in Montana, is known across the industry as an inaccurate oddsmaker for American sports, said Matthew Waters, assistant managing editor at Legal Sports Report. Recently, a quick glance at available bets on GambetDC revealed how badly its odds are set: For the first game of the NFL season, the Detroit Lions were at one point given +265 odds to win while the Kansas City Chiefs were -263. When odds in a matchup add up to a positive value, a bettor can safely wager on both teams. In this example, a $100 bet on the Lions would pay $365, while a $264 bet on the Chiefs would pay $364.38. If someone wagered the right amount of money on both sides, that bettor would be guaranteed to come away with a win or a wash.

The Abunai regular said poor bookmaking and misplaced odds motivated him to wager up to $20,000 on some games and prop bets, which involve team and player statistics rather than the winner of the game. (He chose the poke restaurant, he said, because it was listed first alphabetically among licensees.) He claims to be a sophisticated sports bettor, but winning on the kiosks was relatively mindless: He simply used his phone to browse odds at Caesars, Circa, the Costa Rica-based operator Betcris or other notoriously “sharp” sportsbooks — those with the most accurate odds — and then bet on GambetDC whenever there was a stark discrepancy. Much of his betting was on golf, even though he said he has never watched a round. Taking a similar approach through his account on the app led to severe wagering limits, he said.

On a recent afternoon, the bettor arrived at Abunai with a three-inch stack of GambetDC tickets, most worth a dollar or two under $600. (Such tickets can be cashed on-site. A ticket worth more than $600 must be redeemed at the Lottery’s Prize Center.)

Abunai’s owner, Akina Harada, showed a reporter her GambetDC dashboard, which documented astonishing wagering sums. Thanks largely to one customer, she said, the restaurant’s kiosks took about $670,000 in bets over a single week this past spring. By July, Abunai had collected $197,445 in commissions since getting its kiosks in 2021 — about $107,000 more than the next-highest licensee, according to data provided by the Lottery. Among the 70 restaurants, bars, convenience stores and other retailers with kiosks, the median commission total was $9,466.

Eventually, the bettor received a letter from Peter S. Alvarado, the director of the D.C. Lottery’s Regulation and Oversight Division, notifying him that his wagers would be limited. After he appealed, the city changed limit rules for all D.C. bettors in the name of public safety, and Alvarado told the bettor he would be limited to $60 a bet and $1,000 a day at the kiosks. (Although GambetDC terminals don’t require logging into an account to wager, the Lottery says it has “internal controls” and processes to identify individuals who engage in “excessive play” or violate its wagering limits.)

The 2019 District legislation had allocated the first $200,000 brought in annually from sports betting to problem-gambling services. Earlier this year, however, the D.C. Lottery<a href="https://dccouncil.gov/wp-content/uploads/2023/02/OLG-Responses_2023-Performance-Oversight-Hearing-Responses-to-Committee-Questions.pdf" target="_blank"> disclosed</a> that the Department of Behavioral Health hadn’t spent any of the $800,000 raised for those services. At the time, the Lottery said the department was working to create a problem-gambling prevention and recovery treatment program and hire a specialist.

In July, the Council approved a budget that stripped that funding. “The Mayor took the money away from gambling addiction services and repurposed [it],” Mendelson’s office said in a statement to The Post. “The Council did not reverse her action.”

The office of Mayor Muriel E. Bowser (D) did not respond to repeated requests to comment. The Department of Behavioral Health, which makes no mention of problem gambling on its website, declined to explain why that program and specialist are no longer needed.

“Treatment and support services for problem gambling disorder currently are available through a network of DBH-certified community-based providers,” the department said in a statement. “These services are funded by local dollars as well as reimbursement from federal insurance. In addition, services are available to District residents with private insurance.”

The National Council on Problem Gambling and other advocacy groups expressed outrage over D.C.’s defunding decision. “I’m shocked,” said Carolyn E. Hawley, president of the Virginia Council on Problem Gambling, adding that $200,000 was already a pittance to address a disorder that affects up to 4 percent of the population and receives no federal funding.

In response to questions from The Post, the Lottery did not cite a broader rise in unsafe betting activity, as its announcement suggested. Asked how bettors’ health is at risk if they’re consistently coming out ahead, the Lottery said, “Problem gambling is not defined by whether a player wins or loses and so the rule is not meant to use that as a determinant.”

The Ugly Mug sports bar on Capitol Hill was among the first retailers to get GambetDC kiosks. Owner Gaynor Jablonski said Lottery officials promised extensive marketing support, an influx of restaurant business from people who come to place bets and that customers would be able to make deposits on kiosks using credit cards in addition to cash.

None of that transpired, Jablonski said. “Sadly, like most other D.C. initiatives, no one thought it through.”

Retailers pay $5,000 for a two-year kiosk contract. “On a good week,” Jablonski said, The Ugly Mug makes about $500 in commissions, all taxable. But the restaurant’s manager has to devote hours each day to emptying the kiosks, counting the cash, running a report, taking the cash to the bank and resetting the machines after frequent software malfunctions.

Factoring all that labor, “the Gambet kiosks have cost me money,” Jablonski said.

The new wagering limits for kiosks probably will hurt his bottom line even further. An email from the Lottery to retailers announcing the new rules and shared with The Post makes no mention of what a bettor must do to trigger limits. “It would be like me putting a new hamburger on the menu and not telling the cooks how to make it,” Jablonski said.

Jeff Holibaugh, owner of Cleveland Park Bar &amp; Grill, used to work in the betting industry in Latin America. GambetDC’s policy to cap every bet on a kiosk at $1,000 and not allow credit card deposits, he said, “is like they went back in time 40 years.”

At FanDuel’s sportsbook at Audi Field, bettors are routinely allowed to wager low four figures on the most popular sporting events, according to sportsbook supervisor Timothy Ferguson.

There’s another striking difference: At D.C.’s arena and stadium sportsbooks, customers must be at least 21 and are carded at the door. On GambetDC kiosks, anyone can bet simply by clicking a button to confirm they’re older than 18, no identification required.

Tim Walsh, owner of The Avenue restaurant on Connecticut Ave., said a regular complained recently that he couldn’t find previously available options to bet on golf on the kiosk. Other people interviewed for this story said NASCAR and certain player props seemed to have disappeared, too.

The Lottery explained to The Post: “GambetDC’s retail kiosks reduced the number of available sports and bet types to better reflect player preferences. This change makes it easier for players to navigate the system and find their preferred sports, leagues, and bet types faster.”

Regardless, some restaurateurs are primarily interested in casual bettors and said they’ve been pleased with the kiosks. “We don’t look at it as a major income stream,” said Kamal Ben Ali, co-owner of Ben’s Next Door in the U Street corridor. “We look at it as a great convenience to our guests.”

Still, that income stream probably will shrink for just about every licensee thanks not only to individual limits but also lower overall liability limits for kiosk wagering.

The Abunai bettor used to be able to put down $10,000 to $20,000 with regularity on a single game or prop. Recently, with a reporter peering over his shoulder, the bettor wagered $60 — his new limit — about 10 times on a soccer prop, at which point it became unavailable to all kiosk users.

Dwindling commissions might add to a long list of grievances that the Council will consider when Intralot’s contract expires next year.

“I don’t know that the answer is to give up on Gambet,” Mendelson said. “It may be to improve Gambet.” But, he added, “that may be impossible.”

Danny Funt

The sharp bettor who prompted D.C. to change its sports gambling rules

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