GTECH loses Ohio Lottery contract

PROVIDENCE – GTECH Corp., operator of the Ohio Lottery’s gaming system since 1984, was edged out in bidding for the system’s new contract, the Ohio Lottery Commission announced at its meeting last night.

Intralot – an Athens, Greece-based company whose U.S. operations are based in Duluth, Ga. – is the apparent winner of a two-year contract that will begin July 1, 2009. The tentative agreement allows for as many as four two-year renewals, which could extend its term to a full decade. It has a base value of $170 million over 10 years.

ADVERTISEMENT ADVERTISEMENT

“This was a competitive process in which all three major vendors submitted proposals for our business,” Ohio Lottery Director Michael A. Dolan said. “That competition resulted in state-of-the-art technology and unprecedented savings for our state.”

The vendors’ proposals – from GTECH, Intralot and Scientific Games International – were judged on nine criteria: central systems configuration; retailer terminals; communications network; software controls and data management; games and marketing; vendor facilities and disaster recovery plan; staffing, services and operations security plans; gaming system implementation; and corporate capability.

The Ohio Lottery projected the new deal wouldsave it about $200 million over the next decade, compared with its current GTECH contract. The state cited savings from communications services, equipment “bundling” and lower sales rates paid to the vendor.

The Intralot contract will go before the Ohio Controlling Board for final approval on June 2.

GTECH’s rejected bid had been expected to generate annual revenue of about $25 million, starting in July 2009, with an investment of about $49 million over the proposal’s two-year term, the Providence-based company said this morning. Its Rome-based parent company, Lottomatica Group S.p.A., today confirmed the financial projections of the 2008 - 2010 Strategic Plan it presented on April 7.

GTECH Corp., a wholly owned subsidiary of Rome-based Lottomatica S.p.A. (Italian Stock Exchange: LTO), has been providing lottery technology and services to the Rhode Island Lottery since 1978. To learn more, visit www.gtech.com.