Lottery giant GTECH criticizes rival Scientific Games for 'dark day'
Colorado plans to halt lottery ticket sales for one day this spring while workers install machines that verify which tickets are winners.
New York-based Scientific Games is taking over the job of managing the lottery machines under a state contract worth an estimated $43.5 million. The switch to Scientific Games was supposed to happen Nov. 1 last year, but glitches delayed it twice, pushing the start date to May 2.
Lottery sales will be suspended May 1 while workers put the machines in the 2,500 stores across Colorado that sell tickets.
Scientific Games has had trouble meeting deadlines, though. The firm has paid nearly $1.5 million in contract penalties to compensate the state for two delays.
Aside from a day without lottery sales, consumers wont notice a difference in how they buy scratch tickets or Lotto or Powerball tickets, said Nolan Jones, who is managing the equipment switch for the Colorado Department of Revenue.
We wanted to make sure that the system was ready to go, Jones said. We took advantage of the fact that we had two opportunities to make sure that this thing is as transparent as possible.
Even a one-day shut down could mean a significant money loss for the lottery, which provides money for parks across the state. Ticket sales were $386.2 million in 2003, the latest figures available. Much of that money went to prizes and business commissions, but $103.7 million was for state parks and to help local governments buy parks and open space.
A competitor with Scientific Games, Rhode Island-based GTECH, said a dark day is unusual in the industry, especially given that Scientific Games had two years from when it was awarded the contract to the deadline. GTECH has handled the ticket verification machines since 1988, but it lost a bid to continue in 2002.
Bob Vincent, GTECHs vice president of corporate communications, sent an e-mail message to Colorado media outlets Monday suggesting that Scientific Games had failed its obligations.
Its fine that we went through a procurement (bid) and were not successful, but you have to be able to deliver on the solution that you bid, Vincent said.
Vincent said Scientific Games relationship with the state was especially unusual because the state granted a contract extension even before the initial work was complete. The contract with Scientific Games initially was for six years, but in January the state granted a two-year extension.
The extension was worth about $14 million, Scientific Games said in a Jan. 17 news release.
Scientific Games had not responded to a request for comment late Monday.
The Colorado Bureau of Investigation last year investigated gifts received by lottery employees from two department contractors, including Scientific Games. Department of Revenue spokeswoman Diane Reimer said Monday that the investigation resulted only in a policy change prohibiting employees from accepting gifts.