The New Mexico Lottery's board of directors was busy yesterday, approving a new raffle-style game for later this year, canceling the unique "4 this way" 4-digit game, and ending an 11-year relationship with its current equipment and services vendor.
Finishing a two-year process to analyze its business needs, identify revenue growth opportunities and evaluate vendor capabilities, the New Mexico Lottery yesterday selected Intralot to provide a computerized gaming system, communications network and ticket sales terminals to support 1,100 lottery retailers statewide.
In a unanimous decision, the lottery's board of directors approved Intralot as the lowest bidder and apparent successful vendor, allowing final contract negotiations to begin.
GTECH Corp., which is now a subsidiary of Italy's Lottomatica SpA, was originally awarded the lottery's contract in 1996. The new vendor will have a 7-year contract.
In its best and final offer, Intralot proposed a base price of 1.50 percent of total net sales for each year of the seven-year contract.
Intralot's base price includes new retail terminals and related peripheral equipment as well as communications links to connect the terminals to the system's central site, which would be located in Boise, Idaho.
In Fiscal Year 2007, ending June 30, total net lottery sales were approximately $148 million.
The lottery pays its current gaming system vendor approximately 8.5 percent of annual online ticket sales. The lottery also pays an average $1.4 million a year in retail terminal and communications network fees. The lottery's current contract expires in November 2008.
When compared to the current contract's terms, Lottery CEO Tom Romero said Intralot's proposed rate is projected to result in a savings of $35.4 million over the life of a seven-year contract.
"The rate achieved as a result of this two-year procurement process will help us build a stronger foundation for the future of the Lottery, our state and our beneficiaries," Romero said. "The reduced rate will allow us to return more revenue to the Legislative Lottery Scholarship fund. The new equipment will enhance our communication with players and allow them to check their own tickets for any prizes. The central computer system will support our strategic planning process and provide the tools necessary to help us make more informed decisions in how we manage products, expand retail distribution and increase revenues."
The new system would cut over in November 2008, following a yearlong conversion and testing process that will begin after final contract terms are negotiated and both parties sign the contract.
The New Mexico Lottery would become Intralot's fourth lottery customer in the United States.
Intralot, Inc., of Duluth, Ga., has contracts with the Idaho Lottery at 1.98 percent of total sales, the Nebraska Lottery at 2.39 percent of online sales, and the Montana Lottery at 5.8 percent of net online sales and instant ticket activations.
Lottery Board Approves Raffle Games
In other business, the board of directors authorized the lottery staff to develop a raffle-style game to be launched later in the year. The game will consist of a fixed number of tickets to be sold in numeric order until they are sold out or the drawing is held.
Tickets are expected to be priced at $10 each.
A computerized drawing will randomly select winners.
Details on the first raffle game, including its name, ticket prices and prizes will be announced in the coming weeks. The lottery anticipates holding the first raffle drawing on New Year's Eve.
Unique 4-digit game canceled
The New Mexico Lottery board authorized the lottery to discontinue the "4 This Way" game by the end of the year.
Romero said ticket sales for the game have declined since it was launched in 2004, and the raffle game should generate more revenue.