July 22, 2013 – In what has been described by experts and parties involved as a “weird” and concerning bidding process, the Colorado Lottery accepted a bid from Gtech Corp., awarding them a $62 million contract to replace current operations manager Scientific Games International.
Scientific Games entered a bid to continue their management of the Lottery in competition with both Gtech – an Italy-based corporation, and Intralot – a Greek company with offices in Georgia.
Following the decision, Scientific Games’ regional vice president for government relations, Patrick Traub, told the Denver Post that aspects of the contract bids were unfairly weighted – in Gtech’s favor.
The five-member panel which considered the contract bids weighted price at only 10 percent of the factors leading to their decision. Byron Boothe, vice president of government relations for Intralot, told the Post price was normally weighted at 30 to 40 percent.
“Gtech could have charged $300 million and Scientific Games could have charged $1 and Gtech would still have won,” Traub said.
Adding to the confusion is the makeup of the board which made the contract decision. According to the Post, there is no record of why the members were chosen to evaluate bids, by whom they were appointed, or even when they met to discuss the three proposals.
While sales have increased steadily in the past few years, the state’s payments to beneficiaries, like the Great Outdoors Colorado Trust Fund, have grown very little.
State Sen. Steve King told the Post that “there has been audit after audit showing problems” with the lottery’s in-house management – that is to say operations handled by the lottery itself, rather than a contractor.
Audits over the past ten years have shown the lottery spending excessively, incurring unnecessary travel costs, and even lottery employees taking gifts from vendors – a violation of most government employee ethical codes as it can lead to conflicts of interest.
While official protests of the decision by Scientific Games and Intralot were denied, Scientific Games does not expect to pursue the matter in court. They have appealed to the state for the contract bids to be reconsidered, possibly by a third party evaluator.
Read more on the Denver Post website.