The nation's largest instant lottery company--an Atlanta firm that spent more than $90,000 to push for legal gambling in Washington--yesterday won the lucrative contract to operate up to five city-sanctioned instant lottery games here beginning this fall.
Scientific Games Development Corp., which a spokesman called the "McDonald's of lottery companies," was selected by the D.C. Lottery and Charitable Games Control Board over two other firms that also bid on the multimillion-dollar contract.
Scientific, which operates instant lottery games in 10 of the 15 states that sanction lotteries, waged an $80,000 television and radio advertising campaign in support of a 1980 citizens' initiative to legalize some forms of gambling in the District. The firm also gave $10,000 to the D.C. Committee to Legalize Gambling, which lobbied for the ballot measure.
Two former members of that campaign committee who now serve on the five-member D.C. lottery board--Brant Coopersmith, lottery board chairman, and board member Jerry S. Cooper--said before yesterday's meeting they did not feel pressured to select any particular company to manage the game.
The board declined to state the dollar value of the contract and gave no rationale for choosing Scientific over the other two bidders. Douglass N. Gordon, executive director of the board, said comment was being withheld in order to "maintain the highest integrity of the board."
The board's unanimous decision was immediately challenged by representatives of the two unsuccessful firms, who called it unfair and disappointing.
"I'd like to know the procedures for protest," said Stanley Zimmerman, a lawyer who represents Washington-based Raven Systems and Research Inc. " . . . I'm not satisfied that the process was fair to the people involved in the bidding."
D.C. Del. Walter E. Fauntroy--a longtime opponent of legalized gambling--sent a letter yesterday to the lottery board urging that it give "particular emphasis" to Raven, since it was the only local and minority-owned firm that had entered the bidding. But the last-minute appeal failed to sway the board, which pointed out that the other firms also had some minority involvement.
A representative of Glendinning Companies Inc. of Westport, Conn., the other bidder, said he was "disappointed" at the board's decision.
Scheduled to begin this fall, the instant lottery will be the first game of chance offered in Washington under the ballot initiative that voters approved by nearly a 2-to-1 margin in November 1980. It will be the first form of legalized gambling in the District since 1908, when the old Benning Horse Race Course in Northeast Washington closed.
Daniel W. Bower, executive vice president of Scientific, said late yesterday his company had not officially been informed of the D.C. board's decision and had not determined specifically what type of lottery contests it will offer in Washington.
Under the terms of the lottery contract awarded yesterday, Scientific will be responsible for printing and distributing 10 million lottery tickets, providing computer and accounting services, maintaining security and advertising and marketing the games.
The contract covers a period of about 14 months and must be reviewed by D.C. Department of General Services, the city's contract review committee and the Corporation Counsel before it becomes final.
Next month, the board will begin accepting applications for authorization to distribute the $1 lottery tickets from the city's 8,000 merchants. Customers could purchase an unlimited number of tickets. The contestant would discover if he has won a cash prize by rubbing off a covering label on the ticket.
The lottery board has not yet determined the amount of the cash prizes to be offered. In other states, instant lottery games pay anywhere from $2 to $25,000 on a $1 winning ticket.
Gordon said the game probably will generate about $10 million in sales annually. Of that amount, half will be returned to players in prizes, 30 percent will go into the city's general fund and the remainder will pay for operating costs.
Scientific bid on Washington's instant lottery contract in a joint venture with Games Production Inc., a local minority-run firm that Bower said the Atlanta firm "created solely for the purpose of bidding." He said Games Productions will handle advertising and marketing, while Scientific will perform all the other lottery services.