Gtech, the US lottery giant which is a key member of the UK’s Camelot National Lottery consortium, is being forced to rebid for its contract to run the Texas state lottery.
The move follows an investigation by the federal grand jury in Austin, Texas, into the operation of the lottery and the imprisonment of a senior Gtech executive on corruption charges.
The news will undermine attempts by Camelot to be reappointed to run the UK Lottery, as it casts doubts over the probity of one of its key shareholders. It also casts doubt on the judgment of Lottery regulator Peter Davis, who has assured MPs that Gtech is an acceptable company to help run the UK National Lottery.
Oflot says it still believes Gtech is “fit and proper to be part of the UK consortium”, but a spokesman admits: “The vetting process is not open and closed, it is ongoing. We are constantly watching people.”
A spokesman for the Texas Commission says it has called for a rebid because of the “totality of the circumstances” surrounding Gtech but refuses to be drawn on the precise nature of the circumstances.
Gtech’s former national sales manager J David Smith was imprisoned last November for taking kickbacks related to the New Jersey lottery which also employs Gtech.
The Texas Lottery Commission has been ordered to supply documents to a federal grand jury, which is understood to have been investigating the lottery. The state’s police force, the Texas Rangers, spent two weeks at TLC’s office searching for documents at the end of last year.
Gtech says the decision to force a rebid in Texas has been taken on economic grounds. “The Lottery Commission is expressing interest in seeing if it can get a better economic situation,” says Gtech spokesman Bob Rendine, referring to the supposedly commercial basis of any review.
Texas runs the second largest lottery in the US after New York. Takings from the Texas lottery account for 15 per cent of Gtech’s annual takings of $904m (565m).