The New Mexico Lottery today awarded a contract for a new computer gaming system to Georgia-based Intralot, ending a competitive bidding process that started more than two and a half years ago.
Over the life of the seven-year contract, the lottery will pay Intralot a base price of 1.50 percent — or $18.2 million — on projected total net sales of $1.15 billion. Intralot's base price includes ticket sale and validation terminals for 1,100 lottery retailers statewide as well as related peripheral equipment and a communications network.
The lottery expects to save approximately $35.4 million over existing contract rates. Its current vendor is paid approximately 8.5 percent of annual online ticket sales and approximately $1.4 million a year for retail terminal and communications fees under a contract expiring in November 2008.
CEO Tom Romero said the lottery has negotiated contract rates that are among the industry's lowest.
"Intralot was the lowest bidder and it offered the products and services best suited to help the lottery increase sales and generate more revenue for Legislative Lottery Scholarships," Romero said. "The lottery and Intralot are entering into a relationship that will serve the State of New Mexico very well."
All net revenues from the sale of lottery games benefit the Legislative Lottery Scholarship program, which provides tuition assistance to New Mexico residents attending the state's public colleges and universities.
"We would like to send a message to all students in high school today and to their parents — 'A college education is within your reach,'" said Reta Jones, chair of the lottery's board of directors. "'Stay in school and study hard because this state wants to invest in your future by providing Legislative Lottery Scholarships.'"
New Sales Equipment
Intralot's base price includes but is not limited to:
- Terminals and peripherals for all existing and future retailers, including multiple terminals at select retailers;
- 500 ticket scanners enabling players to check their own tickets for prizes;
- 225 full-service ticket vending machines capable of dispensing both Scratcher games and drawing games such as Powerball (current vending machines dispense Scratcher games only);
- Flat-panel and LED advertising monitors at all retailers;
- Five centrally controlled digital signs;
- Five wireless hand-held sales terminals;
- Software for a VIP players' club.
Romero said small footprint sales terminals and self-service capabilities will help the lottery in its effort to expand distribution among retailers who have been reluctant to sell lottery products because of space and staffing limitations.
Intralot also abided by the lottery's requirement for an investment of materials and services that could help the organization increase product awareness and grow sales. Under the contract, Intralot will provide $50,000 a year to be used for marketing promotions and research, one full-time research position, one full-time promotions position, an events vehicle, and a disaster and business recovery facility. The new gaming system is scheduled to become operational on Nov. 21, 2008.
At the end of seven years, the lottery and Intralot can sign three one-year contract extensions.
New ticket scanner coming to lottery retailers as part of the new gaming system.
Marketing and Communications Director Adriana Binns demonstrates the new equipment.