- Associated Press - Wednesday, January 6, 2016

RALEIGH, N.C. (AP) - North Carolina’s state lottery commission on Wednesday chose some familiar vendors that already provide the equipment, software and tickets to operate its numbers and scratch-off games. The decisions should save the lottery millions of dollars annually.

The panel selected International Game Technology for the lottery’s major operations contract for its ticket-generating computer terminals, software and security systems until at least 2027. It also chose Scientific Games Inc. to print and distribute the instant tickets through at least 2025.

The decisions came after a nearly two-year process and what North Carolina Education Lottery officials called a rigorous review of bids by groups of top lottery staff members before recommendations were made to the nine-member commission.

IGT or corporate predecessor GTECH has held both contracts since 2006, when the lottery first began selling tickets. Scientific Games has been an IGT subcontractor for several years since Scientific Games purchased the previous subcontractor. Scientific Games, through the production of high-priced scratch-off tickets, generates a majority of these instant ticket sales.

After legal agreements are reached, the two contracts will be awarded and take effect in April 2017.

The contract costs are based on a percentage of net ticket sales. Based on projected sales for the year ending June 30, 2017, lottery officials estimate the lottery would pay $26.6 million annually on the two contracts. That’s a 23 percent decrease compared to terms of the current contracts.

“I am totally confident that we have in both situations picked the best proposal,” Alice Garland, the lottery commission’s executive director, said after the meeting. “That is a nice savings and we’re very excited about that.”

Garland said she expects lottery players should see no differences in how the games operate. In fact, she said, they could get tickets a little quicker at convenience stores and other lottery retailers through upgraded terminals and printers and recoded software.

Lottery companies IGT, Scientific Games and Greek-based Intralot all bid for the larger “gaming system” contract. On a 1,000-point scale, IGT received 971 points while Scientific Games got 967 points, according to the final report. IGT said it could do the job for $17.8 million based on projected 2017 sales, which turned out to be $465,000 less than Scientific Games’ offer.

“This was an extremely close competition,” said William Jourdain, a lottery deputy executive director involved in grading the bids. “Price was essentially the deciding factor.”

Scientific Games won the scratch-off ticket printing work over a joint bid by IGT and Pollard Banknote which will still get to produce some tickets.

Some lottery commission members questioned IGT’s selection for the gambling operations contract when one panel scored Scientific Games extremely high on its marketing plans. Commissioners have emphasized increasing ticket sales as the new lottery enters its second decade. Sales reached nearly $2 billion last year, of which $522 million was earmarked for education initiatives.

Commissioner Jody Tyson also wanted reassurances that IGT didn’t receive any favoritism because it had the current contracts. Lottery general counsel Quan Kirk said the process was performed with transparency and integrity.

IGT, a London-based company with a North American headquarters in Rhode Island, referred questions to the lottery commission. A spokeswoman for Nevada-based Scientific Games didn’t return a phone call seeking comment.

GTECH landed the lottery’s first contacts in 2006 when Scientific Games was involved in a criminal probe involving the start of North Carolina’s lottery. Three workers for Scientific Games were convicted or pleaded no contest to crimes. One of those cases was thrown out.

Copyright © 2018 The Washington Times, LLC.

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