Lottery contract breeds concerns

Investigators

HARRISBURG, Pa. (WHTM) — The state will soon award a contract to a vendor to provide games and services for the Pennsylvania Lottery.

The bids are in and the evaluations have begun.

But in Harrisburg when there’s lots of money on the table, there’s lots of shin-kicking under it.

“We’re talking about a contract that’s gonna generate $45 billion in sales and $9 billion in estimated profit over that 10-year period,” Department of General Services spokesman Troy Thompson said.

Those estimated profits would go to the Pennsylvania Lottery to fund senior citizen programs.

It’s a two-part procurement. One part would provide scratch-offs tickets to the lottery. The second and much more lucrative would provide the rest of the lottery games: the machines, the kiosks, the daily numbers, the supporting technology. The winning bidder actually hits the lottery with a contract worth hundreds of millions of dollars to its bottom line.

“This is a more high-profile procurement given the amount of money that it’s worth, and the amount of money generated, and the amount of expertise required,” Thompson said.

“What I am finding is a pretty cutthroat dynamic when you’re talking these multi-billion dollar contracts,” state Sen. Scott Martin (R-Lancaster) said.

Martin sent a letter expressing concern about the contract awarding process in general and one of the bidders in particular: IGT.

IGT is based in Rhode Island and is at the center of an ethics investigation after its governor awarded IGT a 20-year, no-bid contract. Martin and many others wonder if the fix was in.

“There’s ethics complaints about political influence, no-bid contracts for 20 years, and we’re talking annual multi-billion dollar contracts, machines that aren’t performing from these companies being pulled out of facilities,” Martin said.

The issue has caught the attention of Pennsylvania’s auditor general. “Our job is not to tell the state who to pick as vendors, it’s to make sure appropriate policies were followed,” Eugene DePasquale said at a recent news conference.

DePasquale announced a separate audit of the lottery and frequent winners but said he will look into the awarding of this contract because the lottery funds vital senior programs.

“To make sure the seniors are getting every benefit they could and if anything that happened that would potentially deny seniors that benefit, we’ll certainly be asking appropriate questions,” DePasquale said.

Martin has one central question:

“Are we really walling ourselves from the politics of picking a vendor and picking the vendors that actually are going to give the best deals for Pennsylvania?” he asked.

The answer is yes, says Thompson. Since the contract has not yet been awarded, Thompson won’t even confirm that IGT is a bidder in Pennsylvania (ABC27 has confirmed that it is), but did say this about the developing scandal in Rhode Island:

“By law and by regulation, we have processes in place that prevent the type of influence or inappropriate involvement,” Thompson said. “We want to get this right because we know the importance of getting this contract right, and that’s what we’re going to do.”

Scientific gaming has the current contract and last year recorded a record profit. It’s also in the running for the new 10-year contract which should be awarded in 2020 and takes effect in 2021.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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