May 19, 2010

Lottery asks for $99 million, five-year equipment deal

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By Andy Rosen
Andy@MarylandReporter.com

The State Lottery Agency is asking to spend up to $99 million over five years to continue its deal with the company that operates the system used to operate almost all of its systems statewide.

The agreement, coming before the Board of Public Works at its Wednesday meeting, would come on top of an $81 million agreement that’s set to expire next June. The contractor, Georgia-based Scientific Games International, has been working under that deal since 2005.

The agency wants to exercise its five-year renewal option under the deal, which lottery officials say brings in an annual $1.6 billion in revenue for the state. Robert Howells, the agency’s director of procurement, said the deal includes all of the terminals that sell lottery tickets, the Keno system, the computers that track scratch tickets and the satellite dishes that allow different parts of the system to connect.

“It’s the operating system that operates the entire lottery side of the business,” he said. The system will not run the state’s slot machine program, which is managed under another lottery information technology contract approved in January. That deal could cost up to $40 million.

Howells emphasized that the contract before the BPW Wednesday could cost less than the $99 million price tag listed in state documents. The state would have to meet projections that say state lottery revenue will grow in coming years for it to cost that much, he said, because Scientific Games will be paid based on the amount of money the state makes on the lottery.