GTECH executives will appear before Texas commission
The criminal allegations read right out of a crime novel: bribing overseas government officials, withholding evidence and lying about it.
Those are some of the charges Texas investigators accuse GTECH, the international lottery services company that enjoys a lucrative contract with the state of Texas, of engaging in internationally.
The findings have angered and embarrassed lottery commissioners, who have used GTECH as the agency's sole lottery services company since the games started in 1992.
GTECH CEO Bruce Turner and other company executives will appear before commissioners today to face the music, but no one expects the agency to sever its ties to the $4.8 billion giant.
That's because few competitors appear able to step in and provide the same services as the Providence-based company.
"Why aren't there more of them out there?" agency spokesman Bobby Heith asked, before answering his own question: "It's a very large operation."
The company, one of the largest lottery services operators in the world, has drawn international scrutiny for its allegedly aggressive overseas business practices.
In January, after it became known that GTECH might be bought by Lottomatica, an Italian company, investigators with the Texas Department of Public Safety began a six-month investigation.
Among their findings:
- In Brazil, the company is alleged in 2003 to have sent $380,000 to a paper company suspected of laundering money and contributing at least part of the proceeds to political candidates.
- While negotiating a contract in the Czech Republic, GTECH agreed to make a $20 million loan for a sports stadium there.
- The company spent nearly $18 million to hire a consultant in Poland "for his influence," even though the consultant told investigators he was never personally involved in consulting activities in Poland and had traveled there only once for other reasons.
- GTECH allegedly paid a California company $1.9 million between 1999 and 2001, money which subsequently made its way to officials with the Trinidad Tobago National Lottery Control Board. GTECH said it drew up no contract with the California company.
Bob Vincent, a spokesman for GTECH said the overseas allegations against it were "old news" and were self-disclosed to DPS officials. The company has since taken steps to rectify its business practices, he said.
Texas' contract with GTECH expires in 2011, though the state can cancel the contract "at will," said Heith, the agency spokesman.
The company provides a myriad of services in Texas, from tracking and storing state sales data to furnishing each of the 16,500 stores where lottery tickets are sold the roll paper for the online games.
It also helps Texas officials decide which games to close and which new games to adopt.
In return, the company keeps 2.69 percent of the $3.5 billion in annual ticket sales.