The parties behind Lottery Technology Enterprises, the firm that’s run the District’s lottery for more than 25 years, have split up, likely ending the chances for politically connected businessman P. Leonard Manning to continue his control over the city’s numbers games.
According to three sources with knowledge of the situation, lottery provider GTECH and Manning’s New Tech Games will not partner on a bid for the latest lottery contract, bids on which are due June 26. The decision ends a relationship between the companies that stretches back to the early 1980s, when Manning and GTECH together started the District’s first daily lotto game.
Bob Vincent, a GTECH spokesperson, confirms that his company is no longer committed to partnering with Manning et al. “We like and respect those folks,” he says, “but we are in fact looking at various options in respect to the upcoming bid.”
Manning did not respond to requests for comment.
GTECH is the king of American lottery vendors, running the majority of government sponsored games in the country. Vincent declined to speak of any other potential local partners: “Because it’s a competitive procurement, we’re going to obviously play our cards pretty close to the vest.”
The split follows a yearlong drama surrounding the award of a new contract to replace the arrangement that ends this fall. LTE last year submitted a bid to extend its hold on the contract, but the Office of the Chief Financial Officer deemed the bid inferior to that of W2I, a partnership between multinational Intralot and local partner W2Tech—run by Alaka Williams, wife of politically connected businessman Warren C. Williams Jr. The award became a political hot potato in the D.C. Council, which has to approve contracts over $1 million, resulting in the contract being essentially rejected last December.
In the middle of all of that mishegoss, LTE was fined $1.4 million by the D.C. government for a massive security breach in 2006 that led to tens of thousands of dollars in ticket fraud. LTE called the unprecedented fine politically motivated.
A new request for bids was issued last month, and changes in the weighting of various city requirements were considered to be generally favorable to LTE. But the toxic political environment remains.
What are LTE’s options from here? Limited.
Any local outfit has to partner with one of the major multinational corporations that actually design and produce lottery equipment. There’s but three big players: GTECH, Intralot, and Atlanta-based Scientific Games. GTECH, of course, threw its lot in with LTE for the original bid last year and is now uncommitted; Intralot is currently attempting to have the original award enforced through various avenues; they are reportedly wavering on whether or not to participate in the rebid. That leaves Scientific Games, which was once said to be hesitant about entering a politically fraught process but has been receiving preliminary bidding information from the CFO’s office; the company did not immediately return a call for comment. One other vendor, smallish Canadian Bank Note, has also received bidding information.
LTE’s exit opens up an opportunity for another local partner to grab a piece of the lucrative numbers contract. (You may be asking: why are these local partners necessary? LL answered that question in his column last summer.)
Much of the scuttlebutt these days surrounds the intentions of Robert L. Johnson, the BET mogul, who told the Washington Post in February that he intended to bid on the D.C. contract. His gaming-related outfit, Caribbean CAGE LLC, is run by a D.C. legal and political veteran, Bob Washington, who had incidentally been associated with a group that had lost to Manning back in the ’80s. Caribbean CAGE has recently entered into partnerships with Scientific Games to install video lottery terminals in various overseas locales. A spokesperson for Johnson denies that there’s any partnership with GTECH.