California Lottery to Save Millions Through Innovative Contract Bidding.

Business/News Editors

SACRAMENTO, Calif.--(BUSINESS WIRE)--Aug. 16, 2002

Through the use of an innovative competitive bidding process, the California Lottery is expected to save nearly $270 million over the life of a new six-year contract with GTECH Corp. to provide gaming and telecommunications systems and services. The Lottery Commission approved the contract following a two-year, "best practices" bidding process which emphasized early bidder involvement, performance specifications and best value evaluation criteria.

"These huge savings illustrate the benefit of generating competition to drive the best deal possible for the State of California," noted David Rosenberg, chairman of the Commission. "This will enable us to provide better services to retailers and players, improved systems using state-of-the-art technologies, and reduced costs. We will be able to increase Lottery sales which means more money to California's public schools."

According to Lottery Director Joan Wilson, "This bidding process resulted in two excellent proposals from two very qualified firms, GTECH and Scientific Games, Inc. "This level of competition and the use of many innovative steps through the RFP process is unique in the lottery industry and resulted in open and fair competition."

For the first time in California Lottery history, a single firm will manage both gaming and telecommunications systems and corresponding support services. The new gaming and telecommunications systems will be fully operable by October 2003. The contract will continue through October 2009 with options for four one-year extensions.

A few of the technological advances which California retailers and players will see include:

-- Terminals that are more reliable, easier to use, take advantage of touch screen technology, and require less counter or floor space;

-- Increased retailer access, through the terminal, to historical daily financial transaction reports and account statements;

-- Display devices that tell players the amount of the current sales transaction; and

-- A telecommunications network that uses satellite and wireless technology, making it one of the most advanced in the lottery industry.

Note: Additional information about the California Lottery may be found on our web site at www.calottery.com.