Lawyers for two firms seeking to win the lucrative contract to operate the District of Columbia's first legal daily numbers game are scheduled to try to persuade a judge today to continue to block the city lottery board from signing the contract with a third company.
D.C. Superior Court Judge Eugene N. Hamilton temporarily blocked the lottery agency from signing the contract last week with Lottery Technology Enterprises. He said there was a "substantial likelihood" the lottery agency did not adequately consider the minority participation levels proposed by Lottery Technology and the two losing bidders.
The judge, in issuing the 10-day temporary restraining order that expires today, echoed the same complaint that had been made earlier by a city government contract review committee. City law requires that at least 25 percent of the contractor's share of the revenue from the game would go to the minority partners.
At Hamilton's hearing today, the lawyers are slated to argue whether a preliminary injunction should be imposed that would prohibit the lottery board from signing the contract with Lottery Technology until a further court hearing could be held. Over the last week, lawyers for the three competing companies, the lottery board and the city have taken hundreds of pages of sworn testimony from the five board members and others who played a role in the four-month process that led to the selection of Lottery Technology.
Among other things, the testimony shows that:
William Y. Kao, an assistant to Deputy Mayor Alphonse G. Hill and a member of the contract review panel, had earlier helped Hill prepare a report that sharply questioned the extent of the minority participation proposed by Lottery Technology and D.C. Data Co., one of the other bidders. Hill's report, which was given to the board before it selected Lottery Technology, said that only Columbia Gaming Services Inc., the third bidder, provided documents showing adequate minority involvement.
Sources close to the board and the dispute said Kao's role in the Hill report should have precluded him from serving on the contract review committee.
"I think that may have tainted the process," one source close to the lottery board said.
Kao told a reporter this week that his work for Hill did not prevent him from being objective during his deliberations on the contract review committee. Kao and the other two members of the committee all agreed to the panel's findings.
The lottery board appeared to be confused about the criteria to be used to award points to the three firms in evaluating the amount of money the minority firms would receive. The board eventually decided that in one minority participation category all three firms were entitled to the same maximum 20-point score, based on the feeling that the minority partners of all three companies would receive 60 percent of any profits.
Lawyers for Columbia Gaming have contended that the board misunderstood this category, claiming that it relates to cash flow to the minority firms and not a split in any profits. As a result, Columbia Gaming says it should have received more points than the other firms in this category on grounds that Lottery Technology and D.C. Data did not submit documentation to show that an adequate amount of revenue will regularly flow to the minority firms.