Sports Gambling

View full sizeKevin G. Gilbert, The Herald-Mail via APVideo slot machines in Charles Town, Md.

COLUMBUS, Ohio — The company that handles the backroom operations of Mega Millions and other Ohio Lottery games will also monitor the slots-style gambling machines coming soon to the states horse racing tracks.

The Ohio Controlling Board on Monday approved a $9.1 million deal that allows Intralot, a Greek gaming company, to develop a central monitoring system to track the activity of thousands of slot machines, known as video lottery terminals, slated to be installed early next year at Ohios seven tracks.

The board approved the two-year, no-bid contract despite a late effort by Intralot competitor GTECH, which wanted Gov. John Kasich to reopen competitive bidding. The governors office last week rejected the request and the board approved the deal with few questions for Ohio Lottery Commission interim director Dennis Berg and director of operations Constance Miller.

Absent from Mondays meeting was controlling board member Shannon Jones, a Republican state senator from Springboro. Controlling board President Randy Cole said Senate President Tom Niehaus informed him without explanation on Friday that Jones would be replaced by Republican Sen. David Daniels.

Neither Jones or Niehaus office responded to request for comment.

By approving the Intralot deal the state essentially carried over an existing contract. Intralot won a multi-year gaming contract in 2008 that needs to be renewed each biennium.

The deal included an option for Intralot to develop the VLT monitoring system after former Gov. Ted Strickland signaled he favored turning race tracks into racinos to ring up new revenue for the cash-strapped state.

Stricklands plan was held up by litigation, and by the time it was settled he was on his way out of office, the Democratic incumbent defeated by Republican Kasich in 2010. Kasich is picking up the VLT plan.

With Intralots contract needing renewal this summer and its work on a monitoring system not yet done because of the former lawsuit, GTECH asked the state to reopen bidding.

But Miller, from the lottery commission, said it made sense to stick with Intralot because the company could have the system in place by January four months earlier than if the contract was put out for bid. The lottery said it would lose about $2 million a month for each track where VLTs are not operating.

Time, money, you add it all in and they really over-delivered, Miller said. Theyve done everything weve asked. So it made sense to stay with them. Its a good deal for the state of Ohio.

Still, Intralot prepared as if the state would reopen bidding.

They were willing to go out to RFP [request for proposals] even though we had already bid for this, said Byron Boothe, vice president of governmental relations for Intralot. We obviously cut our margin potential to make us competitive. You never want to take anything for granted. The state had a right to hold our feet to the fire and say if you want this contract, give us a competitive offer. And we did.

The deal calls for $5.2 million in fiscal year 2012 and $3.9 million in fiscal year 2013.

GTECH spokesman Robert Vincent, who pushed the state to reopen bidding, accepted the boards decision. The vote was kind of expected, he said Monday. They obviously had their minds made up on this.

Vincent said GTECH remains interested in Ohio should Kasich move to privatize the Ohio Lotterys operations.

Both GTECH and Intralot this year have hired lobbyists with ties to Kasich, who took office in January.

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