Printer Friendly

LOTTERY COMMISSION AWARDS CONTRACT TO GTECH

 SACRAMENTO, Calif., April 21 /PRNewswire/ -- The California Lottery Commission awarded a contract for a new on-line gaming system to the GTECH Corp. today, Lottery officials reported.
 The five-year contract for the installation and operation of a state-of-the art system and 13,000 terminals is estimated to cost $203 million.
 "This is a very good price, about $50 million less than we thought it would cost," said Lottery Director Sharon Sharp. "All the cpay for the present system."
 The decision to contract for the full-service, turn-key system represents a change in the direction that the California Lottery had taken in the past.
 "This Lottery needed a change of direction," said Sharp. "This Lottery had lost its way: sales had declined more than $1 billion over two years and the Lottery had forgotten what its job was. A lottery is not in the high technology business, it's not in the business of spending public money on research and development. The business of a lottery is selling lottery tickets."
 Since the commission adopted an 18-month revitalization plan in November 1992, the California Lottery has seen a number of changes. New games were launched, old games were overhauled, customer service was improved and the organization was streamlined.
 The results of these changes have been seen this year. The players have come back -- over half of all California adults played last month, the highest level in three years. Sales are up. At $1.4 billion to date, sales are 26 percent higher than last year at the same time.
 "That means over $120 million more will go to education this year," Sharp said. "That's the bottom line."
 The direction to take in modernizing the lottery's on-line gaming system had been the topic of discussion at the lottery for years. In the original contract, the lottery purchased the equipment and then contracted with a single vendor to operate the system and provide related services. Staff had explored a number of different ways to restructure the system on the expiration of the original contract. One approach considered was to have Lottery staff operate the system and to contract for other services through a number of separate contracts.
 The new business plan rejected such an approach as less cost-effective than the one represented by the new contract, which requires GTECH to provide the equipment and all related services and to receive payment on the basis of a percentage of sales. This approach, which represents a return to the standard lottery structure, avoids the problem of technological obsolescence, since the vendor is responsible for keeping the system up-to-date in order to maximize sales.
 Controversy erupted when GTECH was the only vendor to submit a bid in response to the lottery's Request for Proposals for the new system in February. Amid allegations of unfairness from other vendors, the governor convened a review panel to audit the lottery's procurement process. The panel concluded in March that the process should continue and that the lottery "has every right to get what it wants from its procurement ... If a single vendor, turn-key operation fits the strategic plan, a company's inability to meet these demands does not mean the lottery must lower its standards. In addition to its mandate to encourage competition, the (lottery) must maximize benefits to the state and maximize net revenues to benefit the public purpose."
 Last week, the Assembly Governmental Organization Committee held a hearing on the procurement process. At that hearing, allegations were made that the lottery had attempted to destroy documents related to the procurement. The lottery's chief counsel, Roland Bowns, told the committee that the Attorney General had investigated those allegations and found them to be totally without merit.
 The new contract will take effect on Oct. 14, 1993.
 The California Lottery Act requires that 50 percent of total sales be returned to players as prizes, and a minimum of 34 percent goes to public education. Of the remaining portion, 6.5 percent pays retailer commissions, and 9.5 percent covers lottery game and operating costs. The lottery's contribution makes up approximately 2 to 3 percent of the total expenditures for public education in the state. Public schools have received more than $5.4 billion from the lottery since October 1985, when the Lottery began operations.
 -0- 4/21/93
 /CONTACT: Joanne McNabb of California State Lottery, 916-324-9639/


CO: California State Lottery ST: California IN: SU:

ML-GT -- SF009 -- 8924 04/21/93 16:08 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Apr 21, 1993
Words:738
Previous Article:NATIONAL MEDIA CORPORATION APPOINTS MICHAEL M. HAMMOND PRESIDENT AND CHIEF OPERATING OFFICER
Next Article:APPLE COMPUTER RESPONDS TO CLINTON'S COMMENTS ON ENERGY STAR
Topics:


Related Articles
GTECH AWARDED FULL FACILITIES MANAGEMENT CONTRACT FOR THE NATIONAL LOTTERY OF IRELAND
GTECH SELECTED TO SUPPLY VIDEO LOTTERY SYSTEM FOR SASKATCHEWAN GAMING COMMISSION
GTECH TO PROVIDE ON-LINE EQUIPMENT AND SERVICES TO THE CALIFORNIA STATE LOTTERY
GTECH ANNOUNCES AGREEMENTS IN ASIA
GTECH AWARDED NEW CONTRACT IN CHILE
GTECH AWARDED CONTRACT TO PROVIDE ON-LINE LOTTERY SYSTEM TO TRINIDAD AND TOBAGO
GTECH TO PROVIDE EQUIPMENT AND SERVICES FOR FIRST ON-LINE LOTTERY IN BRAZIL; COMPANY ALSO ANNOUNCES NEW CONTRACTS IN ICELAND AND IOWA
GTECH WINS LOTTERY CONTRACT IN GERMAN STATE
GTECH ANNOUNCES NEW CONTRACTS
Hoosier Lottery Awards Contract.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters