Brazil probe of Gtech could upset its Florida Lottery deal
By Associated Press
Published May 22, 2004
TALLAHASSEE - The state says it is not dropping its $30-million annual contract with the world's largest lottery game operator, although the company is being investigated for its dealings in Brazil.
The Brazilian scandal has cost Gtech Holdings Corp. its contract to run Puerto Rico's lottery, but Florida officials say so far, there's no reason to cancel the state's arrangement to buy lottery machines from the company.
Gtech, based in West Greenwich, R.I., has been embroiled in a scandal in Brazil for much of this year.
In March, a Brazilian official recommended that bribery charges be brought against two of Gtech's top officials in Brazil and seven other people. And the company has said the U.S. Securities and Exchange Commission has inquired about its dealings in Brazil.
Florida's lottery laws prohibit the state from contracting with any vendor with an officer, director, trustee, partner or joint venturer who has been convicted of a felony.
The Brazil case is in its early stages and "we're going to allow the investigation to take its course," Florida Lottery spokeswoman Leslie Steele said. "We'll comply with Florida law should a change with the vendor's circumstances warrant," Steele said.
Gtech spokesman Robert Vincent said the case could take years to resolve.
Florida's lottery contract has been at the center of a long fight between Gtech and another vendor, Automated Wagering International. AWI won the contract initially, but Gtech sued and won the right to have it rebid.
The Florida Lottery announced in September that Gtech would begin supplying the state's lottery machinery starting in January. The contract is good for up to 10 years. Gtech, which has contributed more than $100,000 to the Republican Party of Florida over the past eight years, wasn't the low bidder, but officials said it impressed lottery executives more than the other bidders.
Gtech operates 26 state lotteries in the United States and operates in 46 countries. The Brazilian lottery is its largest operation, representing about 10 percent of its $1.05-billion in revenue last year.
