Texas Bucks

Jun 28, 2010 6:07 PM

Texas prides itself on being big. Everything that it does seems to underscore that it is big. And when it comes to negotiating contracts, especially those that establish monopolies, the competition is fierce.

That’s what is happening now involving a lottery contract. This hasn’t happened in a decade.

Texas lottery sales are in the $3.5 billion range.

The last lottery contract was for 10 years and was held by GTECH. Since winning that contract, however, the company was taken over by the Italian lottery giant, Lottomatica SpA.

Looking to keep the contract in the USA is Scientific Games Corp. (SGMS), the former Autotote Corp. that recently shed its racetrack wagering business to better emphasize its lottery activities.

Bids from both companies will be reviewed over the summer with a winner announced in September.

Also bidding will be the Greek firm Intralot, a major rival of Lottomatica and the most outspoken critic of Gartner Inc., a consulting firm that had been licensed by Texas officials to evaluate the bids. Gartner Inc. was fired, however, when it was learned that it had been doing business with GTECH.

A new consulting firm, Battelle, will help lottery officials check the bids to see if they meet all the lottery commission’s specifications.

Officials said the winning bid could be worth as much as $100 million annually to the successful company.