Greek company takes over operation of games
At 11:59 p.m. today, in an office park in Strongsville, state officials and a gaggle of computer technicians, some from Greece, will change how Ohioans get their lottery tickets.
Success will be measured by how few people notice.
What happens inside the 80,000-square-foot, unadorned brick building not far from the Lorain County line is being watched like Y2K, at least in the world of state lotteries.
"A lot of people are rooting for us, and some are not," Ohio Lottery Director Mike Dolan said.
The moment marks the first time since 1985 that Ohio will swap the computers, software, countertop ticket dispensers and the company that actually run the state's $2.4 billion lottery, the ninth-largest in the country.
The changeover — which must be completed before convenience store owners raise their steel shutters Wednesday morning — is the largest and most complicated overnight conversion in the country, officials say.
If things don't go as planned, the lottery could lose money. The new system will be hit by more than 3 million transactions on its first day of operation.
"I would not flip the switch if we were not ready," Dolan said.
When he does, lottery players will be able to buy tickets for drawings, such as Pick 3 and Mega Millions, faster than they do now and eventually at automated kiosks the size of soda vending machines. Store owners who sell tickets will have a lot less paperwork because computers will handle their ticket sales and accounting. And the state saves about $20 million a year compared with the current contract.
The switch also effectively crowns the Greek gaming company, Intralot, the victor in the Ohio lottery war that began three years ago when the state asked for bids to run its lottery. At the same time, it will test the company, which has not handled a lottery the size of Ohio's.
The loser is Gtech, an Italian company that had been the online lottery supplier to nine of the 10 largest lotteries in the nation and which built up its business thanks to its Ohio contract.
Intralot received Ohio's 10-year contract worth $180 million to $200 million in May 2008, after bidding $3 million a year less than Gtech and promising to employ newer technology.
In response, Gtech launched a legal and public-relations campaign that made it sound a lot like the Greek goddess Cassandra, predicting that Intralot would fail to be ready today.
In public statements and in court papers, Gtech said Intralot lacks the experience and equipment to properly run online games such as Mega Millions, Pick 3 and Keno. It also said Intralot misrepresented its abilities in its proposal and argued that lottery officials mishandled the bidding process.
In March, a ruling by a Franklin County Common Pleas judge rejected Gtech's claims. Judge John Bender wrote that "it is hard to imagine that a case could be more vigorously contested" but that the lottery didn't misapply the law or abuse its discretion in awarding the contract.
Intralot has a lot riding on the Ohio contract, its biggest to date. Like Gtech, it hopes to use success here to win more business.
"It's their Waterloo," Dolan said.
That's why the company sent project managers from out of state to its new Strongsville facilities six months ago. Several technicians from Greece have also been on site.
Project Manager Lee Wilson said the company has been ready for weeks, having completed tests required by its contract.
Intralot, which employs 270 in Strongsville and is still completing renovations to the building, tested its system by simulating more than 200,000 transactions per minute, well above the test standard of 100,000.
Wilson also said its engineers stopped tweaking the software June 19 because everything is working.
"We tried to crash the system," he said. "We had no problems."
Intralot's Strongsville operations will keep track of every lottery transaction on three large computer servers the size of small trash Dumpsters. The building is also home to a testing and retailer training center and a distribution facility for scratch-off ticket vending machines. Intralot builds the vending machines in Mason, Ohio.
The state's 8,800 lottery retailers — from gas stations to bars — already have the new machines, many still in boxes, though most clerks have been trained on how to use them.
Dolan predicts that the biggest problems will be minor in scope.
"Clerks will forget passwords or how to plug in the machines," he said.
Intralot and the lottery will operate a special call center beginning tonight for retailers with such questions.
In the coming weeks, the public will see for the first time bright-colored self-service machines that can dispense drawing game tickets such as Pick 3 and Mega Millions. The lottery hopes to have about 2,000 machines at retailers, such at Target, by November. To date, only the instant scratch-off tickets have been available at such machines.
Even if the conversion goes off without a hitch, Ohio lottery officials could face another complicated hurdle: managing slot machines at race tracks.
Gov. Ted Strickland has proposed adding the machines to the lottery's plate to help balance the state budget. Intralot has an option in its contract that allows it to handle the software applications of these machines, Dolan said.
But the governor has not consulted the lottery about any proposal, Dolan said.
"We would be happy to build whatever they want," he said.
In the meantime, Dolan said the lottery staff is focused on tonight.
"We are doing everything humanly possible to be ready," he said.