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Scientific Games appeals N.J. Lottery's award to GTECH

Nov 23, 2005, 8:30 am

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Scientific Games

Overbid by nearly $32 million in its unsuccessful attempt to get the state's lottery contract, Scientific Games filed a protest Tuesday claiming officials skewed the bid proposals to keep its current operator.

Earlier this month, the state announced its plans to give GTech Corp., the current lottery operator, a new five-year contract, even though it wasn't the low bidder. The state justified the decision by saying GTech offered a more secure and reliable system and outscored Scientific Games on a ranking system devised by members of an evaluation committee.

But in its protest report, Scientific Games contends the state's evaluation report was geared to make the challenger look tainted and the incumbent flawless.

"It made countless inaccurate statements about Scientific Games and its bid. It identified risks that do not exist and greatly overstated others," the protest said. "It found no fault with or risk in GTech's proposal. It also drastically, and impermissibly, skewed the risk analysis in GTech's favor."

A spokesman for Scientific Games declined comment. Bob Vincent, a spokesman for GTech, said he hadn't seen the protest and would not address specifics.

"We obviously thought the evaluation was handled fairly and evenly, and that can be determined or verified in whatever process goes forward," Vincent said.

Among Scientific Games' other complaints:

The state illegally asked for a best and final offer when GTech originally came in $67 million more -- without prior notice.

The lottery has a conflict of interest with GTech because MWW, a politically connected public relations firm, has a public relations contract with the lottery and is a lobbyist for GTech.

The state did not consider any risk from a potential buyout of GTech by Goldman Sachs and Lottomatica, an Italian company that in the past hasn't been able to get a license from the state Casino Control Commission.

Tom Vincz, a spokesman for the state Treasury Department, also declined comment on specifics until the protest is over.

The head of the Division of Purchases and Public Property will make a ruling on the protest, which can be appealed to the Appellate Division of the Superior Court.

There is no deadline for a decision, Vincz said.

The contract covers operating and maintaining the software and hardware associated with the state's network of 6,200 lottery machines. GTech bid $106.7 million and Scientific Games offered $75 million.

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