- The Washington Times - Wednesday, June 9, 2010

D.C. Lottery partner Emmanuel S. Bailey’s business profile boasts of having deep political contacts at the federal and state levels, multiple businesses and “successful executive careers in finance and banking.”

So it seemed a natural fit when the well-connected former Fannie Mae executive signed with Intralot, the Greek-based international gambling company that won the District’s $38 million lottery contract and needed a local face to gain D.C. Council approval.

Known for being well-spoken, well-mannered and well-dressed, Mr. Bailey was once described by The Washington Post as a self-made businessman who thrived on risk and opportunity. One outward sign of his success: the $150,000 Bentley he parks outside the Verizon Center during Washington Wizards games.

But in Mr. Bailey, Intralot also gained a partner with a messy employment history who has left behind a trail of troubled businesses and lawsuits.

And, after emerging from the D.C. Lottery procurement saga as a 51 percent partner, Mr. Bailey may have bought himself a pig in a poke, gambling analysts say. Historically perceived as a license to print money, even the two companies who vied for the D.C. contract are lukewarm about its prospects.

Intralot Vice President Byron E. Boothe Jr. said D.C. Lottery revenues dropped from $275 million to $240 million this past year, and are expected to dip below $200 million in the coming years. The reason? The District’s lottery revenues are draining into Maryland, which has approved slot machines, and - along with Virginia - has begun selling both Powerball and Mega Millions tickets.

“We didn’t believe slots would pass in Maryland,” he told The Washington Times. “And we didn’t think Maryland and Virginia would both start to cross-sell Powerball and Mega Millions.”

Mr. Boothe said Intralot pursued the contract because in the eyes of the firm’s European customers, “there’s cache” in running the lottery contract in the U.S. capital.

Robert Vincent, a spokesman for lottery company GTech, which along with a different local partner has run the D.C. Lottery for 25 years, said the D.C. Lottery is “one of our least profitable contracts.”

“No one is asking about the value of the D.C. Lottery,” he said. “They are buying it as a commodity, but it is small, and D.C. is a tough place to make a buck.”

The D.C. Council voted 9-1 in December to approve a new five-year lottery deal despite questions from many about the procurement process.

Council Chairman Vincent C. Gray abstained on the lottery vote but afterward said an appearance by Mr. Bailey and Intralot before the council raised his confidence in the contract award.

In also abstaining, at-large D.C. Council member Kwame R. Brown put his finger on perhaps the most unusual aspect of the contract: Mr. Bailey’s company, Veterans Services Corp. (VSC), was appended to the deal after it had been awarded to Intralot, circumventing the vetting process for VSC.

“I suggested the request for proposals require local businesses to be part of the procurement process,” said Mr. Brown, chairman of the council’s Committee on Economic Development. “When you go back and select a partner after an award, they have not been fully evaluated. It’s a backwards way of doing things.”

While Mr. Brown did not question Mr. Bailey’s credentials, there is little to suggest that council members, or even Intralot, closely examined his professional history.

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