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GTECH explains pricey N.J. Lottery contract

New Jersey LotteryNew Jersey Lottery: GTECH explains pricey N.J. Lottery contract
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Seeking to justify a price tag of nearly $32 million more than a competitor to run the New Jersey's lottery for the next five years, representatives of the state's lottery operator said Wednesday that their system is more convenient for vendors and would result in less down time and lost revenues for the state.

Representatives for GTech, which won a new contract despite bidding $106.7 million to Scientific Games' $75 million, said the higher price comes with more assurance that its terminals are twice as reliable as the existing ones — meaning fewer lost sales for the lottery due to repairs of 6,000-plus lottery terminals throughout the state.

"The more this terminal goes down, the more loss of sales you get," said Richard S. Meehan, director of hardware development for GTech. "That's why we design the terminal to go down as little as possible."

Representatives for Scientific Games, which is contesting the bid in a quasi-court proceeding before former Supreme Court Justice Daniel J. O'Hern Sr., have testified that the state's evaluation committee exaggerated their company's weaknesses while ignoring any of GTech's.

Scientific Games was criticized among other things for its terminal design, because its bar code scanner is located on the right, not center, of the machine.

One of the company's lawyers, Dana Klinges, who has tried to prove that there is little difference in size between the two proposed terminals, said any lost counter space for retailers could be offset with different models of the plastic racks where instant tickets are stored.

"If the state had to pay an additional cost for plastic instant ticket dispensers, do you think it would cost $32 million?" Klinges said.

Most of the proceedings to date have centered on the two companies' technical ability to upgrade the state's lottery network and terminals — something that will be required of whichever company that wins the contract.

The hearings will now shift to the ethics of the deal.

Scientific Games has said the state was biased toward the incumbent and skewed by a conflict of interest involving the MWW Group — a firm that had a public relations contract with the lottery while lobbying for GTech.

MWW officials have said their roles as lobbyist and promoter never crossed.

Former state Attorney General John J. Farmer Jr. is slated to testify today for Scientific Games on the appearance of impropriety, while GTech is expected to counter with two collegiate legal ethics experts that there was no conflict of interest.

Gannett

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5 comments. Last comment 10 years ago by Rubi 311.
Page 1 of 1
floridian's avatar - DiscoBallGlowing

United States
Member #45802
August 28, 2006
335 Posts
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Posted: October 12, 2006, 2:57 pm - IP Logged

Seeking to justify a price tag of nearly $32 million more than a competitor to run the New Jersey's lottery for the next five years, representatives of the state's lottery operator said Wednesday that their system is more convenient for vendors and would result in less down time and lost revenues for the state.

Representatives for GTech, which won a new contract despite bidding $106.7 million to Scientific Games' $75 million, said the higher price comes with more assurance that its terminals are twice as reliable as the existing ones — meaning fewer lost sales for the lottery due to repairs of 6,000-plus lottery terminals throughout the state.

"The more this terminal goes down, the more loss of sales you get," said Richard S. Meehan, director of hardware development for GTech. "That's why we design the terminal to go down as little as possible."

Representatives for Scientific Games, which is contesting the bid in a quasi-court proceeding before former Supreme Court Justice Daniel J. O'Hern Sr., have testified that the state's evaluation committee exaggerated their company's weaknesses while ignoring any of GTech's.

Scientific Games was criticized among other things for its terminal design, because its bar code scanner is located on the right, not center, of the machine.

One of the company's lawyers, Dana Klinges, who has tried to prove that there is little difference in size between the two proposed terminals, said any lost counter space for retailers could be offset with different models of the plastic racks where instant tickets are stored.

"If the state had to pay an additional cost for plastic instant ticket dispensers, do you think it would cost $32 million?" Klinges said.

Most of the proceedings to date have centered on the two companies' technical ability to upgrade the state's lottery network and terminals — something that will be required of whichever company that wins the contract.

The hearings will now shift to the ethics of the deal.

Scientific Games has said the state was biased toward the incumbent and skewed by a conflict of interest involving the MWW Group — a firm that had a public relations contract with the lottery while lobbying for GTech.

MWW officials have said their roles as lobbyist and promoter never crossed.

Former state Attorney General John J. Farmer Jr. is slated to testify today for Scientific Games on the appearance of impropriety, while GTech is expected to counter with two collegiate legal ethics experts that there was no conflict of interest.

Anybody:

Does not GTech manage the Louisiana Lottery?  Either than or one or more of the Southern States.  They have huge assets and apparently put their spare cash in the right pockets.

Floridian

    Avatar
    Delaware
    United States
    Member #30273
    January 14, 2006
    494 Posts
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    Posted: October 12, 2006, 4:54 pm - IP Logged

    The easiest way to boycott this is with your dollar. Spend it elsewhere and make it harder for them to afford the contract.

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      Northern California
      United States
      Member #19948
      August 9, 2005
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      Posted: October 13, 2006, 12:17 pm - IP Logged

      The real pricing equation is tough to calculate sometimes...

       

      For example, if you bid a percentage of sales, you assume a certain level of sales, times your percentage, to get an estimated contract cost to the State. I haven't seen those assumptions published.

       

      Look at neighboring Connecticut - their terminals (admittedly, they are old) break down all the time.

       

      SciGames also has no experience running a state this big. It would only take a couple of extra days of down time to make up most if not all of the difference. In fact SGI has been late with virtually every implementation they've done in the last couple of years - months late recently in Colorado.  Those delays end up costing money and public confidence.

       

      Sounds like sour grapes to me.

       

      Some times you get what you pay for. Do you want a Yugo or (at least) a Chevy?

        Avatar

        United States
        Member #1826
        July 11, 2003
        2645 Posts
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        Posted: October 13, 2006, 4:26 pm - IP Logged

        The real pricing equation is tough to calculate sometimes...

         

        For example, if you bid a percentage of sales, you assume a certain level of sales, times your percentage, to get an estimated contract cost to the State. I haven't seen those assumptions published.

         

        Look at neighboring Connecticut - their terminals (admittedly, they are old) break down all the time.

         

        SciGames also has no experience running a state this big. It would only take a couple of extra days of down time to make up most if not all of the difference. In fact SGI has been late with virtually every implementation they've done in the last couple of years - months late recently in Colorado.  Those delays end up costing money and public confidence.

         

        Sounds like sour grapes to me.

         

        Some times you get what you pay for. Do you want a Yugo or (at least) a Chevy?

        Connecticut is close to New Jersey, but it's not really a "neighboring" state.

        Really, I can't tell you which terminal is better than the other. They all do the same things to me. Personally, I like the look of GTech tickets over that of Scientific Games. GTech just looks more professional. But then again, I'm a connoisseur when it comes to this stuff. 

        (insert signature here)

          Rubi 311's avatar - scene sunoverlake.jpg
          Illinois
          United States
          Member #40207
          May 29, 2006
          2024 Posts
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          Posted: October 13, 2006, 7:54 pm - IP Logged

          GTECH Corporation has MORE resources than any other gaming corporation that exists at this point. I believe they run 29 out of 34 states and around 56 lotteries outside the U.S.  They run Louisiana, Florida, Texas, Illinois, Georgia...and many more.

          My spouse USE to be the GTECH Operations Manager for ILllinois for years. His comparison of GTECH to other gaming corporations..."It depends on what kind of vehicle you want to get you there...a Cadillac or a Pinto?"