OPENPUBLICA · PUBLIC MEETING RECORD
Record of Proceedings

Budget Oversight Hearing on the Office of Lottery and Gaming – May 4, 2026

Council of the District of ColumbiaMonday, May 4, 2026
BodyWashington, District Of Columbia
SessionCouncil of the District of Columbia
DateMonday, May 4, 2026
StatusFILED
Video Record
0:00 / 2:37:35

Transcript — Verbatim
7:01

Recording in progress.

7:06

Good morning everyone.

7:08

I am Matt Freuman, Ward Three Council Member and Chairperson of the Committee on Human Services.

7:13

Today is Monday, May 4th, and we are meeting in person in room one twenty-three of the John A.

7:19

Wilson building and virtually via Zoom.

7:22

The time is now nine oh seven AM.

7:28

Today we are conducting the budget oversight hearing on the Office of Lottery and Gaming or OLG.

7:34

OLG is the regulatory body over all licensed gaming in the District of Columbia, including lottery, charitable gaming, and sports wagering.

7:55

OLG functions in a manner different from many other district agencies as it is an enterprise fund, meaning OLG generates revenue that it uses both to run the agency and to transfer to the general fund.

8:09

Since its inception in nineteen eighty-two, the DC lottery has transferred more than two point four three billion dollars to the district's general fund.

10:00

The red light indicates your mic is on.

10:02

After our witness is done providing his testimony, I and if other council members come may ask a series of questions before moving to our virtual witnesses.

10:13

I'll now call our in-person witness.

10:21

I don't see Mr.

10:22

Sanchez.

10:26

So if Mr.

10:27

Sanchez arrives, we will give him the opportunity to testify in person should he choose to join us online.

10:36

Uh he's welcome to do that.

10:39

In the meantime, I don't is there anyone else here who uh who wanted to testify in person who wasn't listed.

10:52

Does not look like that is the case.

10:55

I will now call our virtual witnesses to speak in panels of four.

11:00

For each witness, I will call your name and a member of my staff will make you a panelist.

11:05

If you uh wish to appear on video, you must click the button in the toolbar at the bottom of your screen that looks like a video camera.

11:14

Please remain muted until it is your turn to testify.

11:18

When it is your turn to testify, please unmute yourself.

11:22

Once all our virtual witnesses on a panel for in each panel of four have testified, I and if other council members join may ask a round of questions, so please stay on the Zoom muted until you are recalled.

11:36

For any technical difficulties, you can send a message to the host, which is labeled Committee on Human Services, and they will follow up with you.

11:45

Additionally, if you are having trouble gaining access to the Zoom and you have pre-registered, you can reach my team at Human Services at DC Council.gov, and they will try to resolve your issue.

11:59

Now let's turn to our first panel of virtual witnesses.

12:04

Uh Jordan Briggs, Elise Cohn, Christopher Khalitri, Richard Baldwin.

12:25

All right.

12:26

Wonderful.

12:27

It looks like all are in place.

12:29

Jordan Briggs, when you are ready, we can start.

12:34

Thank you.

12:35

Good morning.

12:36

My name is Jordan Briggs.

12:37

I'm an attorney at IFRA Law, a boutique gaming law firm based here in DC.

12:41

IFRA Law has many accolades in the gaming space, including being instrumental in creating the legislative and regulatory framework for online gaming in Delaware, New Jersey, and Nevada.

12:50

I'm here to talk about the legality of implementing off-track betting sites and historical horse racing in DC.

12:58

I'll refer to these as OTBs and HHR in my testimony.

13:02

Under the paramutual laws of the state and agreements with racetracks, OTBs allow patrons to place paramutual wagers on live horse races without physically being present at the racetrack.

13:13

Bets are pulled together, the operators take a regulated commission, and winners share the remaining pools.

13:19

HHR machines offer a form of paramutual wagering that fits well into this framework.

13:24

On HHR machines, users may engage with paramutual wagering with pooled bets on the basis of previously run horse races, irrespective of the on-screen visual.

13:33

We believe that federal law does not prohibit DC from creating a framework to license OTBs and provide HHR in the district.

13:41

The Johnson Act prohibits the interset interstate transportation of gambling devices, and this definition includes DC and states.

13:49

However, the Johnson Act has an exemption for any machine designed and manufactured primarily for use at a racetrack in connection with paramutual vetting.

13:57

This exemption applies to OTBs and HHR because they both provide paramutual wagering under government licensing schemes with permission from the racetracks.

14:06

The Act also exempts devices explicitly enumerated as lawful by state statute.

14:12

Accordingly, under either exemption, the district's authorization of OTB sites and HHR machines would not run afoul of federal law, and the door remains open for the district to consider authorization and regulation of these machines.

14:25

Several states already allow HHR, including New Hampshire, Virginia, and Wyoming.

14:30

In these states, facilities that host HHR machines must be authorized or licensed by the State Racing Commission or equivalent body.

14:37

States with OTB and HHR have benefited greatly.

14:40

In Virginia, HHR had six million in statutory withholdings, benefiting general tax funds and other state directives.

14:47

Further OTVs are physical locations.

14:50

Placing physical HHR machines inside authorized OTBs can provide certain consumer protections as well as direct financial boost to the local community.

15:00

OTB facilities need security guards and operational control managers, staff for customer service, kitchen staff, weight staff, and more, i.e., on state employees who live in the area.

15:12

Thus, we believe there is a strong justification for the district to create a legal framework that would authorize a licensure system for OTB sites in the district, and the allotment of a certain number of HHR machines to each OTB.

15:25

Each state adopts its own regulatory framework for gaming, and we encourage the council to look to other states, states such as Virginia to look for examples on how to implement such a system, how to increase tax revenue and create jobs.

Discussion Breakdown — Share of Meeting
Cannabis Regulation████████████████████████████28%
Miscellaneous████████████████████████████28%
Fiscal Sustainability██████████████████████22%
Procedural██████████████14%
Personnel Matters█████5%
Economic Development███3%
Summary of Proceedings

Budget Oversight Hearing on the Office of Lottery and Gaming – May 4, 2026

On May 4, 2026, from 9:07 AM to 11:37 AM, the Committee on Human Services, chaired by Councilmember Matt Freuman (Ward 3), held a budget oversight hearing on the Office of Lottery and Gaming (OLG). The hearing examined OLG's proposed fiscal year 2027 budget, operational challenges, and potential expansions of gaming in the District. Public witnesses testified on off-track betting (OTB) and historical horse racing (HHR), games of skill, and regulatory oversight. Government witnesses, led by Executive Director Randy Burnside, addressed the agency's budget, a recent drawing error, and the status of the lottery system contract.

Public Comments & Testimony

  • Panel 1 – OTB and HHR Supporters:
    • Jordan Briggs (attorney, IFRA Law) argued that federal law does not prohibit the District from authorizing OTB sites and HHR machines, citing exemptions under the Johnson Act. She noted Virginia's HHR generated $6 million in statutory withholdings in 2024, benefiting the general fund and a veterinary college.
    • Elise Cohn (managing member, Long Shots LLC) urged the District to authorize OTB and HHR, projecting $92–$130 million in annual recurring tax revenue from a fully mature market of about 1,500 machines. She contrasted HHR's in-person, facility-based model with iGaming's online risks.
    • Christopher Khalitri (director of historical horse racing, Ainsworth Game Technology) explained that HHR terminals use paramutual wagering on anonymized past races, not random number generators, and are deployed in licensed in-person facilities as in Kentucky and Virginia.
    • Rich Baldwin (managing partner, GGHM) estimated a right-sized HHR market could support 1,500–2,000 terminals, generating $300–$350 million in annual gaming revenue, translating to $80–$115 million in direct tax revenue at a 25–35% tax rate. He noted that 90% of current sports betting revenue in DC is online.
  • Panel 2 – Technical and Small Business Perspectives:
    • Steve May (Gaming Laboratories International) offered independent technical support for HHR, iGaming, and OTB, emphasizing GLI's role in certifying gaming devices and conducting audits.
    • Tori Key (Key Play Advisors) advocated for inclusion of small businesses and Certified Business Enterprises (CBEs) in any gaming expansion, suggesting satellite models like Arizona's OTB agents or Virginia's Rosie's facilities.
    • Janice Richardson Sloan (legal counsel, Art Gaming) requested the District raise its maximum payout per play from $599 to $1,999 (to avoid federal reporting triggers) and expand games of skill terminals to off-premise alcohol retailers (Class A and B licenses). She estimated that these changes, with about 4,000 machines, could generate $141 million annually.

Discussion Items

  • OLG Budget and Revenue:
    • Executive Director Randy Burnside testified that OLG's proposed FY27 operating budget is $222,201,452, a decrease of 18.4% ($49.99 million) from FY26, primarily due to the Sports Wagering Amendment Act of 2024, which moved sports wagering operations to commercial operators. The lottery transferred $32.5 million to the general fund in FY25, and the FY26 forecast is just over $30 million. Burnside noted that the District received over $51 million in total gaming revenue in FY25, the highest since 2017.
    • Burnside expressed concern about a funding gap of roughly $1.5–$2 million for regulatory oversight, as sports wagering and games of skill fees are low. He highlighted that 10 vacant positions provide flexibility but warned that future demands—such as commercial bingo, growth in games of skill, or new sports wagering operators—could strain resources.
  • DC 3/4/5 Drawing Error:
    • Burnside reported that from March 31 to April 21, 2026, a coding error in the RNG system prevented duplicate numbers (e.g., 111, 7765) from being generated in midday and evening drawings. The error was identified and corrected within 24 hours. OLG is providing coupons, free plays, and a second-chance drawing with $150,000 in prizes to affected players. He noted that the vendors (Smart Play International and GLI) have taken responsibility, and OLG is seeking to recover costs.
  • Lottery System Contract RFP:
    • Burnside explained that the previous RFP for the central gaming system, ticket printing, and iLottery was canceled after only one qualifying bidder declined to sign the contract. A revised RFP is expected to be sent to the Office of Contracts by the end of the week (May 8, 2026). The current contract expires July 15, 2026; a one-year renewal (with three options remaining) will be submitted to the Council for approval before the summer recess. Burnside emphasized the need for a balanced RFP that protects the District's interests while attracting bidders.
  • Advertising and Responsible Gaming:
    • OLG's FY27 budget authorizes up to $9 million in advertising, but actual spend was $7 million in FY26. Expenditures include sponsorships with local sports teams, signage, streaming ads, and bus wraps. All advertising includes a responsible gaming message. Burnside noted that the advertising contract is competitively bid and that the current contract is being renewed.
  • Commercial Bingo and Games of Skill:
    • Rules for commercial bingo are being drafted and expected to be filed by April 2026. One potential operator has expressed interest but is challenged by the need for large venues (~25,000 sq ft). Burnside clarified that pop-up events at the Howard Theater were not bingo but talent-based game shows, falling outside OLG's regulation.
    • Games of skill machines are currently in about 30 bars/taverns, generating only $128,000 in tax revenue annually. Burnside anticipated growth but noted limited funding for oversight.

Key Outcomes

  • No formal votes were taken. The hearing was informational, focusing on budget oversight and policy exploration.
  • Councilmember Freuman acknowledged the new proposals for OTB/HHR and stated they would not be considered in the current budget process but would be on the radar for future discussion.
  • OLG will proceed with issuing a revised RFP for the lottery system contract by the end of the week and will submit a one-year contract renewal to the Council for approval before July 15, 2026.
  • OLG will continue to remediate the DC 3/4/5 drawing error, with vendors expected to cover costs. The agency will strengthen internal controls and certification processes.
  • The committee will accept written testimony until 5:00 PM on May 11, 2026.
  • The hearing adjourned at 11:37 AM, with the next hearing scheduled on the Internet Gaming and Consumer Protection Act (Bill 26-0656).

Meeting Transcript

Recording in progress. Good morning everyone. I am Matt Freuman, Ward Three Council Member and Chairperson of the Committee on Human Services. Today is Monday, May 4th, and we are meeting in person in room one twenty-three of the John A. Wilson building and virtually via Zoom. The time is now nine oh seven AM. Today we are conducting the budget oversight hearing on the Office of Lottery and Gaming or OLG. OLG is the regulatory body over all licensed gaming in the District of Columbia, including lottery, charitable gaming, and sports wagering. OLG functions in a manner different from many other district agencies as it is an enterprise fund, meaning OLG generates revenue that it uses both to run the agency and to transfer to the general fund. Since its inception in nineteen eighty-two, the DC lottery has transferred more than two point four three billion dollars to the district's general fund. The red light indicates your mic is on. After our witness is done providing his testimony, I and if other council members come may ask a series of questions before moving to our virtual witnesses. I'll now call our in-person witness. I don't see Mr. Sanchez. So if Mr. Sanchez arrives, we will give him the opportunity to testify in person should he choose to join us online. Uh he's welcome to do that. In the meantime, I don't is there anyone else here who uh who wanted to testify in person who wasn't listed. Does not look like that is the case. I will now call our virtual witnesses to speak in panels of four. For each witness, I will call your name and a member of my staff will make you a panelist. If you uh wish to appear on video, you must click the button in the toolbar at the bottom of your screen that looks like a video camera. Please remain muted until it is your turn to testify. When it is your turn to testify, please unmute yourself. Once all our virtual witnesses on a panel for in each panel of four have testified, I and if other council members join may ask a round of questions, so please stay on the Zoom muted until you are recalled. For any technical difficulties, you can send a message to the host, which is labeled Committee on Human Services, and they will follow up with you. Additionally, if you are having trouble gaining access to the Zoom and you have pre-registered, you can reach my team at Human Services at DC Council.gov, and they will try to resolve your issue. Now let's turn to our first panel of virtual witnesses. Uh Jordan Briggs, Elise Cohn, Christopher Khalitri, Richard Baldwin. All right. Wonderful. It looks like all are in place. Jordan Briggs, when you are ready, we can start. Thank you. Good morning. My name is Jordan Briggs. I'm an attorney at IFRA Law, a boutique gaming law firm based here in DC. IFRA Law has many accolades in the gaming space, including being instrumental in creating the legislative and regulatory framework for online gaming in Delaware, New Jersey, and Nevada. I'm here to talk about the legality of implementing off-track betting sites and historical horse racing in DC. I'll refer to these as OTBs and HHR in my testimony. Under the paramutual laws of the state and agreements with racetracks, OTBs allow patrons to place paramutual wagers on live horse races without physically being present at the racetrack. Bets are pulled together, the operators take a regulated commission, and winners share the remaining pools. HHR machines offer a form of paramutual wagering that fits well into this framework. On HHR machines, users may engage with paramutual wagering with pooled bets on the basis of previously run horse races, irrespective of the on-screen visual. We believe that federal law does not prohibit DC from creating a framework to license OTBs and provide HHR in the district. The Johnson Act prohibits the interset interstate transportation of gambling devices, and this definition includes DC and states. However, the Johnson Act has an exemption for any machine designed and manufactured primarily for use at a racetrack in connection with paramutual vetting. This exemption applies to OTBs and HHR because they both provide paramutual wagering under government licensing schemes with permission from the racetracks. The Act also exempts devices explicitly enumerated as lawful by state statute.

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