The contract is up for a bid, and the competition is fierce.
Companies that run lotteries around the world are expected to ante up by this week, proposing how they would oversee the Texas Lottery if they were to land its lucrative operations contract. The Texas contract, currently held by Gtech Corp., rarely comes up for bid, so the stakes are high for the competing businesses and taxpayers.
It’s a coveted contract, one that could net the winning bidder as much as $100 million per year.
Three firms — Scientific Games Corp., Intralot Inc. and Gtech — will probably submit bids, according to comments and actions by the companies since the beginning of the year, when the Texas Lottery Commission issued a request for proposals.
“The Texas Lottery is a highly valued customer of Gtech’s, and we are preparing to bid,” said Gtech spokesman Bob Vincent, who wouldn’t discuss the bidding process any further. Other likely bidders wouldn’t comment last week.
Since the request for proposals, the bidding process has been caught in conflict because a consulting company the commission hired to help write the bid request had been doing business with Gtech. That led to questions about whether Gtech has an unfair advantage in the selection system.
The consultant, Gartner Inc., had its contract revoked by the commission, and the deadline for bids was extended twice to remove any doubts about unfairness in the bidding, lottery officials said. The new deadline for bids is Tuesday.
A panel of Lottery Commission officials and a representative from the Texas comptroller’s office will evaluate the bids, with a decision expected in September. The Lottery Commission hired a new consultant company, Battelle, to take the place of Gartner and help check the bids to see whether they meet all the commission’s specifications, said lottery spokesman Bobby Heith.
The bidders’ financial proposals won’t be revealed by state officials even after Tuesday’s deadline passes. Only when the winning bid is selected will provisions of the new contract be public, Heith said.
The Chron has more on the GTech conflict of interest, and a quote from a familiar source.
Dawn Nettles, who owns the watchdog Lotto Report, predicted the agency would stick with its longtime operator.
“My prediction is GTECH will be awarded the contract, irregardless of who bids what,” Nettles said. “Because there are ties. And they’re not going to be broken. … I think for the purposes of our taxpayer dollars, and the fact we’re in such dire straits for money, I believe the Texas lottery ought to go with the best price.”
I will not be surprised if that prediction turns out to be true. There’s plenty of room for improvement in how the Lottery is run, though a lot of that is the Commission’s fault. Be that as it may, this is a rare opportunity. I hope we take advantage of it.