D.C. Will Run Out of Scratch-offs Before New Contract
July 12, 2013 – After yesterday’s news that the D.C. Council had rejected a proposed four year, $9.7 million contract with Lottery vendor Scientific Games, the contract will need to be rebid, a process that will take six months or more.
David Umansky, a spokesman for the D.C. office of the Chief Financial Officer, said that when the Lottery’s current, temporary deal with Scientific Games expires July 20, the Lottery will be able to continue selling some scratch-offs.
But the Lottery’s warehouse does not have enough tickets to last for the six-month-or-more process of rebidding the contract to vendors, Umansky said.
He could not estimate how long it would be before the last scratch-offs were sold.
The D.C. Council rejected the proposed deal with Scientific Games in light of issues with the vendor’s local subcontracting.
D.C. law mandates that 35 percent of contracts for government operations be given to local subcontractors. Scientific Games only subcontracted 17 percent of their contract to local businesses.
The vendor requested the requirement be waived in their case, saying they could not subcontract any more of the deal – a request denied due to a lack of information that would justify the waiving of the requirement.
In late June, when the D.C. Council began raising concerns about the scratch-off contract with Scientific Games, Lottery director Buddy Roogow told the council’s Finance and Revenue committee that a rejection of the contract would take a serious toll on Lottery revenues.
“We in a very short period of time will not be able to sell instant tickets,” Roogow said.
Scratch-offs account for about $12 million a year, roughly a quarter of the Lottery’s annual revenues.
And if no contractor who bids on the Lottery’s operation is able to meet the subcontracting requirements, the Lottery’s “Scratchers” may disappear for good.
“We will be the first lottery ever to walk away from instant tickets,” Umansky said.