Intralot is evaluating its legal options after its bid to service the Maryland State Lottery was rejected despite an initial favourable reception.
The Greek lottery technology company’s bid to run a Lottery Central Monitoring and Control System (LCMCS) was initially recommended by the Maryland State Lottery and Gaming Control Agency (MLGCA).
This 10-year contract would see Intralot manufacture the counter terminals and self-service vending machines used to sell lottery tickets at 4,300 Maryland Lottery retailers. It would also develop the software behind sales and accounting functions, alongside other B2B services.
However, the MLGCA has now rejected the bid, which Intralot states is based on “the alleged failure to meet the minimum required percentage of subcontracting to local subcontractors”.
Intralot has taken offence at this. The company asserts that its bid is ‘technically sound and by far the most advantageous’ in comparison to other offers, including by giving a prominent role to nine local businesses via subcontracting – this has proven to be the main point of contention, however.
The firm’s statement explained: “This 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.
“Moreover, the company had provided the Commission with very detailed clarifications, and the Commission was fully aware of the identity and role of these subcontractors.”
A blow to Intralot’s US ambitions?
It now intends to pursue legal action against the MLGCA, stating that this is in the best interests of its shareholders. It is unclear whether the firm intends to force the MLGCA to reverse its decision and put it back in the dominant position in the licence tender contest, secure some kind of financial restitution, or simply an apology.
Intralot’s determination to challenge the regulator’s rejection would not be surprising at the best of times, but is particularly understandable given recent developments involving the company.
The firm agreed terms to acquire Bally’s Interactive earlier this year, a deal which will see it integrate the US company’s international B2B assets. One of the motivations behind this was a desire to expand in the US and secure long-term, stable and lucrative deals with the many state lotteries active throughout the country.
Clinching a deal with the Maryland Lottery would be a big step in this direction. Additionally, the fact the contract included a term for a possible five plus one year extension may have further rubbed salt into the wound.
Of course, the MLGCA will have its own rationale for changing its mind on the Intralot contract and will likely be gathering its own legal resources in anticipation of the Greek firm’s legal intentions.