A bingo machine supplier has been charged with fixing prices and selling its products directly to charities, according to state records and public filings.
The Texas Lottery Commission will hear evidence Friday against Game Tech International, the largest supplier of electronic bingo machines in Texas.
The allegations concern the behavior of a former employee and are untrue, said Andrejs K. Bunkse, general counsel for Game Tech.
"We will actively defend ourselves and believe there will be no finding of wrongdoing," Bunkse said.
The three-member commission could impose a fine against the Nevada company, revoke its Texas license or take no action.
A jury ruled against Game Tech last year in a federal lawsuit in Arizona. Jurors found that Game Tech improperly terminated its contract with a former distributor, Trend Gaming Systems of Austin, which complained about the price-fixing. The jury awarded Trend $3.5 million.
A Game Tech sales agent said pricing guidelines would help the company overcome pricing battles among distributors, according to an e-mail obtained by Trend for its lawsuit. The guidelines would help charities but cut into the supplier's profits.
"Game Tech management would determine how much each individual market could bear and hold price accordingly," the e-mail said.
Bunkse said the e-mail came from a former employee and declined to comment further.
But in a March letter sent to the commission, Game Tech's attorneys said state law does not prohibit price agreements between manufacturers and distributors so the company could not be held liable for price-fixing.
Texas law requires a bingo equipment manufacturer to sell or lease its equipment to a distributor, who then leases supplies to charities that conduct the games.
A manufacturer can work with distributors to ensure a minimum return, but law prohibits the manufacturer from dictating an exact price.
More than 1,300 charities are licensed to use bingo for fundraising, according to the Lottery Commission.