Lawsuit could delay games, lawmaker says
Questions are being raised about the legality of the proposed marriage of the Tennessee and Georgia lotteries and whether a legal challenge by a jealous vendor could stall the start to the Tennessee lottery.
State Attorney General Paul Summers was asked yesterday to examine the question of whether Tennessee and Georgia can strike a ''strategic alliance'' under terms of the law that created the lottery this spring.
The request came from state Sen. David Fowler, R-Signal Mountain, who is concerned that such an arrangement may violate a provision of the Tennessee lottery law that requires competitive bids for all major procurement contracts any gaming product or service worth more than $75,000.
''I just don't want to see us get off on a bad foot and wind up getting sued, which will reflect poorly on everybody, including the legislators who are subject of being accused of having not monitored this new creation of theirs,'' Fowler, an attorney, said in an interview.
Rebecca Paul, CEO of the Georgia lottery, tossed out the idea for the partnership a few weeks ago. She said the arrangement would get the Tennessee lottery up and running by the end of the year.
Denny Bottorff of Nashville, chairman of the Tennessee Education Lottery Corp., said the board's lawyer is researching the legality of the proposed arrangement.
''The premise is we are able to contract with a state,'' said Bottorff, ''so our contract would be with the state of Georgia, which would not be a major procurement contract.''
Fowler said such an arrangement should be approached with caution.
''The thing that concerns me is if we strike some deal that is not consummated pursuant to a bidding process then you open yourself to the possibility of a lawsuit by other providers of these products,'' he said. And that, he said, could delay the start of the lottery by months.
''We are talking about frustrating scholarships for students who will be graduating this coming spring,'' Fowler said. ''It is important we not find ourselves starting the bidding process in December because we have been tied up in court for three months.''
One section of the lottery legislation says the board is authorized to enter into written agreements with one or more states or sovereigns for the operation, participation in marketing, and promotion of a joint lottery or joint lottery games.
Backers of the legislation explained that when the bill was being discussed in the legislature, the provision was included to allow Tennessee to participate in such multistate games as Mega Millions and Powerball.
Another section says that all major procurement contracts must be competitively bid, but the requirement does not apply ''in the case of a single vendor having exclusive rights to offer a particular service or product.''
Georgia is the only state proposing such a partnership.
State Sen. Steve Cohen, D-Memphis, and state Rep. Chris Newton, R-Benton, chief sponsors of the lottery legislation, say they are not clear whether their legislation permitted a partnership.
''It appears there is a way that can be done, but I had rather get this out now and make sure it is done right rather than get down the road and find we didn't follow the letter of the law,'' Newton said.
Cohen blasted the lottery board for the way it is handling the startup.
He said the board is visiting the wrong states looking for guidance and has not asked him or his staff for any help. Cohen spent the most of two decades pushing lottery legislation before it passed and went to a public referendum last November.
''I'm so turned off to Nashville and the whole process and the whole team up there. I am just really turned off to all of it,'' he said.
Cohen accused Gov. Phil Bredesen's legal counsel, Bob Cooper, of inserting language into the lottery bill to facilitate the Tennessee-Georgia partnership.
''Somebody who has looked at the law, some of the language inserted into the law by Bob Cooper on behalf of the governor, one of the House amendments, some people think there is language in there that could maybe facilitate this and particularly to allow for there not to be a request for proposal,'' Cohen said.
''Whether it is legal or not, I don't know, and if it is legal, it was language put in there by Bob Cooper and it slipped past me.''
Attempts to reach Cooper for comment were not successful, but Bredesen's press secretary, Lydia Lenker, said: ''That is news to us. The idea of a joint venture was not even contemplated while the bill was being passed. The administration's sole motivation in offering its amendments was to achieve ethics, accountability and fiscal responsibility in the operation of the lottery.''