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Backlash in Calif. over sale of lottery operator GTECH

GTECH CorporationGTECH Corporation: Backlash in Calif. over sale of lottery operator GTECH

As the new 2007-08 Legislature convened Monday, the backlash over an Italian firm's quiet takeover of California's lotto contractor grew when a second legislative committee said it would investigate.

Assemblyman Alberto Torrico, a Newark Democrat who chairs the government organization committee in the lower house, said his panel is probing the matter and may convene hearings.

"I'm taking a look at the situation. I've read the press report. I've been briefed by my staff," said Torrico, whose committee oversees the California State Lottery. "We're going to do everything in our power to investigate. We'll take a look at what's happening with this contract, what the company has become.

"If a hearing or hearings are warranted, we're going to hold those hearings," he continued. "If any administrative rules or any existing law has been violated — which I'm not saying there has been — that should be a concern to all of us."

Officials at the lottery and at GTECH, the online gaming contractor that has been purchased by Lottomatica — an Italian firm with a spotted history — said they stand ready to answer lawmakers' questions and assert that it's business as usual at the lottery.

In the upper house on Monday, Senate leader Don Perata, D-Oakland, reasserted plans to probe the issue.

Over the weekend, Sen. Dean Florez, a Fresno-area Democrat who is chairman of Senate government organization committee — responding to documents obtained by MediaNews from the government — announced his committee would hold a hearing on the issue this month.

Torrico said Monday that he may approach Florez, who expressed surprise upon learning about the deal over the weekend, to discuss the committees' meeting together.

Republican legislators questioned the deal as well.

Legislators and government watchdog groups are concerned about whether the lottery, in the wake of GTECH's acquisition by Lottomatica in a $4.7 billion deal, will remain fair to players, prize winners and schools, which get a third of the revenue.

GTECH runs the lotto and other online games in California and 24 other states.

The governor-appointed Lottery Commission normally weighs major new contracts or contract renewals under the 1984 voter-approved Lottery Act. But the authors didn't address mergers involving major contractors.

The lottery's acting director is standing by her decision to approve California's part in the merger, based on the agency's own investigations, legal counsel and briefings of commissioners.

The agency tasked with defending them in court, the Attorney General's Office, was not consulted.

After being shown internal investigative documents obtained from the government on the merger, lawmakers and others questioned the buyer's antitrust conviction, lotto terminal shutdowns, lack of audits, absence of vendor and employee background checks and whether the U.S. accounting and legal probes of the deal were adequate.

GTECH President Bruce Turner said the company would, among other things, promptly notify California in case of "any change of control" of its buyer, that Lottomatica "will address personal disclosure requirements" for key employees and others, and implement "anti-corruption and anti-bribery programs."

Lottery spokesman Rob McAndrews said that despite new ownership, operations and senior management of GTECH will remain essentially unchanged.

The merger, finalized in August, is expected to be operationally complete by year's end.

MediaNews

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4 comments. Last comment 10 years ago by psykomo.
Page 1 of 1
Avatar
Northern California
United States
Member #19948
August 9, 2005
151 Posts
Offline
Posted: December 6, 2006, 1:48 pm - IP Logged

"After being shown internal investigative documents obtained from the government on the merger, lawmakers and others questioned the buyer's antitrust conviction, lotto terminal shutdowns, lack of audits, absence of vendor and employee background checks and whether the U.S. accounting and legal probes of the deal were adequate."

I'm still trying to figure out what this paragraph means. What is "anti-trust conviction"? Are they implying that GTECH or Lottomatica was convicted of violating anti-trust laws? Never happened as far as I know - I suppose its possible the Lottomatica may have had a problem overseas where the laws are different.  Lotto terminal shutdowns? What - where? Lack of audits? Lotteries get audited (though not on performance) for security virtually every year - including GTECH systems. Absence of background checks? I worked for GTECH in CA for over 10 years - I always had an updated background check as a condition of employment that was done by the Lottery.

 

I guess I don't get it. It sounds to me like Perata is looking for a whipping boy - especially now that GTECH doesn't do direct political contributions any more. 

    MADDOG10's avatar - smoke
    Beautiful Florida
    United States
    Member #5709
    July 18, 2004
    20240 Posts
    Offline
    Posted: December 6, 2006, 6:15 pm - IP Logged

    While they're at it they might want to see if Torrico, Perata and Florez

    had any contributions from any of the above. What a waste of time and money when they've already been scrutinized 100 times over.

    Did'nt the same fools do this to AT&T back when? Oh, thats right boys make sure you let the people know that you're doing your jobs so the public does'nt get taken in..Had any trips to Mexico lately, or maybe to the "Big Island" fellas???

                                                 

                                                   " You can not control the Wind, but you can direct the Sail "

      Avatar
      New Member
      Montreal
      Canada
      Member #44292
      August 2, 2006
      4 Posts
      Offline
      Posted: December 6, 2006, 6:52 pm - IP Logged

      Your posts re: GTECH always provide "a dependable and unvarnished insider's perspective"!

      Hopefully, there is little potential for this to gain traction and create a chain reaction among other jurisdictions in the USA.

      Here's one downside to consoldation accross global markets/cultures, to consider when the majors decided to merge!

        psykomo's avatar - animal shark.jpg

        United States
        Member #4877
        May 30, 2004
        5143 Posts
        Offline
        Posted: December 6, 2006, 7:04 pm - IP Logged


        Drivedabizness:::::::::::::::::::::>>>>>>>>>>>>>>>>>>>>>>

        Nice to know someone gets an updated background check as a

        condition for lottery employment...............................................!

        Did anyone ever stop by your pad and check-out that big & nice

        25 cu. ft. FREEZER LOCKER in the back-room??????????????????

        FREEZER's work great for keeping CASH fresh and if you get in a

        big hurry to spend a FEW$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

        just put, block in the MICRO-WAVE.............much better than ATM 

        machine........................................NO TRACE<<<<<<<<<<<<<<

        Now stop & think for a minute, I am not saying you have ever

        done anything wrong, BUT would CASH in a FREEZER or a SWISS

        bank ##### ever show-up on anyone BACKGROUND-CHECK???

        LOL

        PSYKOMO