Legislators stall the hiring of Intralot
Treading carefully through a legal minefield yesterday, a panel of state legislators put off a decision to hire a new company to run popular Ohio Lottery games, including Pick 3, Mega Millions and the upcoming Keno game.
The state Controlling Board, a panel of legislators that votes on major spending proposals, spurned a request by Lottery Director Michael A. Dolan to approve a one-year contract with Intralot SA, a Greek company with U.S. headquarters near Atlanta.
Legislators said they were uneasy about handing the keys to Intralot while the current lottery vendor, Gtech Corp., challenges the lottery's decision to dump it in favor of its upstart competitor.
Both companies have hired lawyers and lobbyists in Ohio. Dolan acknowledged that the Ohio Lottery probably will be sued regardless of the outcome.
State Sen. John Carey, R-Wellston, played off the lottery's slogan of "Odds are, you'll have fun" in explaining his decision to postpone a decision. "Although the odds are that Gtech is not going to win this contract, they should have the chance to go forward with their protest hearing," Carey said.
On Tuesday, Gtech filed a 35-page formal protest in which it accused lottery officials of bungling the process by which they picked Intralot over it and another competitor, Scientific Games Corp.
Gtech said the lottery had impermissibly lowered its bidding requirements to allow Intralot, whose largest U.S. lottery is in Nebraska, to compete despite a prerequisite that vendors have experience in a state similar in size to Ohio.
Gtech also accused the lottery of overlooking possible misrepresentations by Intralot.
Gtech officials plan to state their case to Dolan and other lottery officials in an hourlong hearing today at lottery headquarters in Cleveland.
Despite the protest, Dolan had urged Controlling Board members to approve the contract with Intralot so the company could get to work quickly on readying its computers and other equipment for the Ohio Lottery.
The contract would have spanned one year and set up Intralot to take the reins in July 2009, when Gtech's contract expires.
"This contract is for a dollar, for a year's term, with no further obligation to the state of Ohio," Dolan said.
Intralot executives also said they were eager to get to work and dismayed by the delay.
"This will start to be a big deal," the company's U.S. president, Tom Little, said in an interview. "Any lottery, especially one the size of Ohio, is going to want to use as much time as they can to get it right. Any delay hurts both of us."
A Gtech spokesman, Robert Vincent, said the company is pleased that its protest will get a hearing. "We're hoping that the director (Dolan) will hear our protest with an open mind," Vincent said.
Dolan argues that Intralot will save the lottery $24 million a year, which would go to public schools.
Gtech officials say the lottery is taking a chance on an untested competitor.