News & Observer | newsobserver.com | Three companies vie to run lottery

Published: Dec 29, 2005 12:00 AM
Modified: Dec 29, 2005 04:18 AM

Three companies vie to run lottery

 

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Three companies told the state that they intend to compete to operate the lottery, according to letters of intent released Wednesday.

Scientific Games of Georgia, which is under investigation for possible violation of lobbying laws, has said it will bid to supply scratch-off instant-win tickets and to run games in which buyers pick numbers, called online games.

Oberthur Gaming Technologies will bid for the instant tickets job, and GTECH Holdings Corp. of Rhode Island will bid for the online games.

The value of the lottery contracts is not known but is expected to be worth millions of dollars each year.

The letters of intent keep companies in the direct pipeline for more bidding information. Companies that did not send in letters still may bid.

Bids for the seven-year contract are due Jan. 13, and winners will be chosen Feb. 2. The commission wants scratch-off tickets ready for sale in early April.

Charles Sanders, the lottery commission chairman, said he was pleased to have two bidders for each piece of the state's lottery work, which is typical of other states' experiences. The state investigation into Scientific Games lobbying does not disqualify the company, he said.

"The noise surrounding the activities here in North Carolina is just that," Sanders said. "Until they're precluded for any other reason, they're a legitimate bidder."

Scientific Games sits at the center of controversy over the lottery's creation. Kevin Geddings of Charlotte, a former lottery commission member, worked for Scientific Games this year. He did not register as a lobbyist and did not disclose his work for the company before he resigned from the commission. The state is investigating two other people connected to the company. Violating lobbying laws is a misdemeanor.

Scientific Games is the only company able to meet all the state's requirements for printing, warehousing, distributing and marketing instant lottery tickets. GTECH, Scientific Games' main rival, is not capable of printing tickets but could enter the instant-ticket competition if it works with a printing company.

"We're still trying to figure out the best approach to take," said Angela Geryak Wiczek, a GTECH spokeswoman. "As it stands now, we have not partnered with anyone."

OGT, a ticket printer, would have to subcontract some work to qualify for the North Carolina job.

The company, which has a headquarters in Texas, has lottery contracts in Maryland and Virginia, among other states. In Virginia, OGT subcontracted management of ticket storage and distribution to GTECH. The two companies also work together providing instant tickets in Nebraska. There, GTECH won the state contract with OGT designated as its subcontractor for ticket printing.

Staff writer Lynn Bonner can be reached at 829-4821 or lbonner@newsobserver.com.

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