A legal challenge and contract dispute could put state lottery scholarships at stake

Published: Aug. 17, 2017 at 4:55 PM EDT|Updated: Aug. 17, 2017 at 5:34 PM EDT
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COLUMBIA, SC (WIS) - The South Carolina Education Lottery wants to switch to a faster, more efficient gaming system.

But the lottery's interim director says a legal challenge filed this month by the contractor behind the current system could delay the complicated transition process.

In a letter to the state's Chief Procurement Officer, SCEL Interim Executive Director Hogan Brown calls for lifting an automatic stay imposed after Intralot, Incorporated protested the awarding of a new contract to IGT Global Solutions Corporation.

Intralot won the contract to provide online lottery services to the state in 2008.

The $67.8 million contract was supposed to run for seven years with an optional three-year extension and is scheduled to expire March 14, 2018.

But earlier this year, IGT won a bidding process that opened last October. The new contract totals $77.5 million over 10 years.

Brown says the new system "will be much more efficient and operate with significantly more speed than the almost 10-year-old technology."

Brown says Intralot's protest has already put implementation of the new system behind schedule. He says major tasks that must be accomplished between now and next March include building a primary and backup data center, conversion of millions of data records, training SCEL employees, installation of new terminals and internet, cellular and satellite technology, training more than 3,800 retailers and security measures.

Brown says the current system and its equipment need increasing repairs and replacement, but performance will diminish as Intralot employees "are probably already looking for new employment."

He also says South Carolina's system needs to be operational by March 14 in order to handle new features being added to the Powerball game nationally in April.

If not, Brown says the state would have to stop offering Powerball tickets.

The SCEL generates more than $1 million a day to support educational purposes and programs including scholarships. This year, the lottery has already turned over about $400 million dollars to the state.

The interim director says minimizing further delays for the new system "will mitigate the harm that would be caused to SCEL and students of South Carolina who rely on the General Assembly appropriations for scholarships and tuition assistance."

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