PRESS RELEASE
LOTTOMATICA GROUP ANNOUNCED THAT GTECH INDIANA, LLC HAS
SIGNED A 15-YEAR INTEGRATED SERVICES AGREEMENT WITH THE
INDIANA (HOOSIER) LOTTERY
ROME, ITALY and PROVIDENCE, RHODE ISLAND (US) - October 13,
2012 - Lottomatica Group announced that its wholly-owned
subsidiary, GTECH Indiana, LLC (GTECH), has signed the
15-year Integrated Services Agreement (ISA) with the Indiana
(Hoosier) Lottery on October 12, 2012. The ISA term will run
through June 30, 2028, with transition services commencing
immediately, and commencement of full services expected to
begin on July 1, 2013.
Under the ISA, which is subject to the Hoosier Lottery's
control over all significant business decisions, GTECH will
manage the day-to-day operations of the Hoosier Lottery and
its core functions, including lottery game development;
retailer recruitment and training; call center operations;
supply of goods and services; subcontractor and vendor
selection and management; instant-ticket management and
distribution; and marketing and advertising. Responsible
gaming programs will be embedded throughout these operational
processes and core functions.
"The goal of this process was to create a positive working
relationship with a provider that could substantially improve
the performance of the Hoosier Lottery, and the
post-selection negotiation spoke volumes about GTECH's
commitment to our goal," said Hoosier Lottery Executive
Director Karl Browning. "Our selection team was clearly
impressed by GTECH's business plan, as was the Commission,
and the credibility of that plan paved the way for a smooth
negotiation over the past several days."
"By leveraging the operational expertise, innovative
technology solutions, and local market insights of GTECH and
Lottomatica, we were able to make a very compelling proposal
to the Hoosier Lottery to enter into this ISA," said
Lottomatica Group CEO Marco Sala.
"GTECH has developed a comprehensive business plan to
generate approximately $500 million of additional net income
for the State of Indiana over the first five years of the
base services agreement commencing July 1,
2013," said GTECH President and CEO Jaymin B. Patel. "We are
committed to making the Hoosier Lottery one of the top 10
U.S. lotteries in
terms of sales and net profit per capita, as well as a World
Lottery Association certified leader in responsible gaming
programs and practices. More importantly, this sustainable
net income growth will become a reliable source of funding
for good causes supported by the Hoosier Lottery."
Senior leadership for the GTECH Indiana team has been
identified and is ready to begin the transition to the new
Integrated Services model immediately. The team will be led
by Connie Laverty O'Connor, a 32-year lottery veteran who
recently served as the CEO of Northstar Lottery Group in
Illinois, and has held senior leadership positions at the New
York and Georgia lotteries.
"Our experience in managing a U.S. lottery's transition from
a State- executed model to an integrated-services model will
be brought to bear in Indiana, particularly as we begin the
ramp-up phase," stated GTECH Indiana CEO Connie Laverty
O'Connor. "Working hand-in-hand with the Hoosier Lottery, we
will build a world-class team aligned around a common goal -
a commitment to delivering incremental revenues to the
residents of Indiana."
Commencing with the fiscal year starting July 1, 2013, to the
extent that the actual net income earned by the State each
year exceeds the net income guaranteed by GTECH (bid net
income), GTECH will earn incentive compensation for each
dollar in excess of bid net income, up to an annual maximum
of five percent of the actual net income earned by the State
in such contract year.
In the event actual net income is less than bid net income in
a contract year, GTECH will be required to pay the State for
such shortfall, provided that the net income shortfall
payment may not exceed five percent of bid net income in such
contract year.
GTECH will also be reimbursed for certain costs in connection
with the procurement, including, but not limited to, those
related to managing the Hoosier Lottery such as its personnel
costs and other overhead expenses, as well as be reimbursed
for lottery expenses incurred by GTECH in connection with
fees paid to subcontractors for the provision of goods and
services.
Related press releases: October 4, 2012
Lottomatica Group is a market leader in the Italian gaming
industry and one of the largest Lottery operators in the
world based on total wagers and, through its subsidiary GTECH
Corporation, is a leading provider of lottery and gaming
technology solutions worldwide. Together, the companies are
the only vertically integrated full service lottery group.
Lottomatica Group is majority owned by De Agostini, which
belongs to a century-old publishing and media services group.
Lottomatica is listed on the Stock Exchange of
Milan under the trading symbol "LTO." In 2011, Lottomatica
Group had €3.0 billion in revenues and 8,000 employees in
over 60 countries.
For further information:
Robert K. Vincent Simone Cantagallo Lottomatica Group S.p.A. Lottomatica Group S.p.A. Corporate Communications Media Communications
T. (+1) 401 392 7452 T. (+39) 06 51899030
This press release and previous ones are available on Lottomatica and GTECH web sites:
www.lottomaticagroup.com- www.gtech.com
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