Photo by Images_of_Money

At a D.C. Council committee hearing on a controversial Internet gambling initiative that was quietly approved in late 2010, legislators, activists and residents sparred over the murky process that gave birth to what is still the nation’s only such program.

Largely left aside were the actual merits or drawbacks of allowing online gambling as critics and some councilmembers zeroed in on a 2009 lottery contract that they said they unknowingly voted for without being properly informed of a provision that would eventually allow Internet gambling.

While Councilmember Michael Brown (I-At Large), the program’s sponsor, defended Internet gambling as an “innovative and viable revenue enhancing vehicle” that could bring the city $13 million in its first three years, Councilmembers Tommy Wells (D-Ward 6) and David Catania (I-At Large) focused their ire on D.C. CFO Natwar Gandhi, accusing him of making last-minute changes to a 2009 $120 million lottery contract to give a green light to Internet gambling.

Despite Gandhi’s argument that the contract had been properly negotiated and bid, his lead procurement officer admitted under withering questions from Wells that the contract never actually included the words “gambling” or “gaming,” but rather an oblique reference to “non-traditional games.”

There was even disagreement as to how to refer to the program, with Brown and D.C. Lottery Executive Director Buddy Roogow opting for “iGaming” while Wells pushed for it to be identified as “gambling.”

“There’s no point in mixing those words around unless we’re trying to somehow convince the public that it’s not gambling. I think we just need to deal with this straight on — we’re looking at a government-sponsored program to allow gambling in the District of Columbia, whether you do it online, whether you hold the cards in your hand or whether you hold the cards on the screen of your computer. We’re talking about gambling the the District of Columbia,” he said during an opening statement.

Under the program, residents or visitors physically within the District would be able to log on and play a number of games, from poker to Blackjack. Players could only lose $250 a week — or $13,000 a year. Roogow said that once given the go-ahead, he could have the program up and running within 30 days.

Brown said that any further delays would leave the District at the mercy of other states looking to implement similar programs. “Other states seeking to follow our path and perplexed by our indecision and delay and are hoping to beat us to the market,” he said.

That might end up happening. Catania seemed infuriated by how the lottery contract had been negotiated, and said that he did not realize that he was voting for Internet gambling when the council approved the contract.

“Essentially this is the most extra-legal action that I have ever seen. This calls for the resignation of those responsible, right up to the top. You have essentially robbed this body of its legislative authority,” he said to Gandhi, adding that he would even go so far as to file a lawsuit to stop Internet gambling from taking effect.

The hearing capped off what has been something of an upside-down process for Internet gambling. Having been authorized by the council as part of a 2010 supplemental budget and passed congressional review, Internet gambling is technically legal now. Yesterday;s hearing was only to consider legislation by Wells to repeal it, and Councilmember Jack Evans (D-Ward 2), who chaired the hearing, said he was unsure how he would proceed.