Intralot said it “intends to pursue every legal remedy available” after the Maryland Lottery and Gaming Control Agency (MLGCA) rescinded its approval of the company as the state’s next lottery provider.
On July 17, the Greek gaming solutions supplier announced that the MLGCA had approved its U.S. subsidiary as the recipient of the Lottery Central Monitoring and Control System contract following a competitive bidding process, in which Intralot competed with two other bidders. Two days earlier, at an MLGCA meeting, commissioners heard why Intralot had been chosen over the other companies: Scientific Games, which is the existing contract-holder, and IGT.
The contract grants a company the right to run terminals and self-service vending machines at more than 4,000 retailers, as well as to develop software and services for the lottery. Intralot said its contract would run for an initial 10 years and that it was worth around $260 million.
Maryland announced new direction Aug. 1
However, on Aug. 1, the MLGCA said in a release that it determined after awarding the contract that Intralot’s proposal did not satisfy the requirements of the request for proposals (RFP) or state law. The MLGCA alleged that Intralot failed to meet the minimum required percentage of subcontracting to local subcontractors.
“Upon determining that our initial assessment was incorrect, we have taken appropriate action to move forward with the procurement process in accordance with procurement law,” said MLGCA Director John Martin. The lottery publicly confirmed that the incumbent contractee and the second-ranked bidder, Scientific Games, is now the recommended contract recipient.
The MLGCA told SBC Americas that the procurement process will remain active until the Maryland Board of Public Works (BPW) has approved a contract award.
“We aren’t able to comment on active procurements,” added a spokesperson. “The BPW will consider the contract award at a future date.”
Intralot cries foul on lottery’s claims
In a statement on Aug. 4, Intralot said the MLGCA’s decision “comes as a great surprise, especially considering that Intralot, Inc. had allocated a significantly higher percentage of the project to local subcontractors than the minimum required.”
It claimed that the lottery commission was fully aware of the identity and role of the proposed subcontractors and ruled that all participants in the bidding process complied with the requirements of the RFP.
“The bid submitted by Intralot, Inc. is technically sound and by far the most financially advantageous, significantly outperforming the second-best offer,” added Intralot. “The Company reserves all its legal rights and intends to pursue every legal remedy available to protect the interests of its shareholders.”
The MLGCA did not offer SBC Americas a comment on Intralot’s statement.
DC subcontractor debacle casts cross-border shadow
The MLGCA has not confirmed exactly what violations it alleges against Intralot. But next door to Maryland, in D.C., Intralot has a colorful history involving its relationship with subcontractors.
Intralot was formerly the exclusive provider of regulated sports betting in Washington, D.C., via a deal struck in 2019 which was fast-tracked without a competitive bidding process. Intralot and the D.C. Lottery first used the maligned GambetDC platform before Intralot subcontracted with FanDuel. Last June, the D.C. Council voted to open up the sports betting market to other operators.
Last November, Attorney General Brian Schwalb’s office launched an investigation into the Intralot contract amid allegations of improper conduct. In January of this year, Intralot reached a $6.5 million settlement with the D.C. Council after the probe found Intralot had lied to the council about collaborating with a local subcontractor to secure an exclusive wagering contract.
Intralot had vowed to work with Veterans Services Corporation (VSC) to land the deal, but a probe by Schwalb’s office found that Intralot was in fact teaming up with another subsidiary while still taking money from VSC. VSC also illegally failed to allocate 51% of its revenue to other small businesses.
Schwalb called Intralot’s deal with VSC in D.C. “a sham from the start — an elaborate scheme to secure a lucrative, high-profile opportunity on a sole-source basis while circumventing the district’s small business contracting laws.”
