Keno on way! Contract OK'd despite its foes

December 03, 1992|By Marina Sarris | Marina Sarris,Staff Writer

Top state leaders approved a $49 million contract for a keno lottery game yesterday, as Gov. William Donald Schaefer denied that the deal involved any "shadowy dealings" or illegalities.

Despite complaints from a pastor, several businessmen and a representative of Maryland's horse racing industry, the Board of Public Works unanimously approved a contract with GTECH Corp. to operate and provide equipment for keno gambling.

The bingo-like lottery game will be played in bars, restaurants and bowling alleys statewide beginning Jan. 4. It will operate from 6 a.m. to midnight, seven days a week.

The board, which consists of the governor, treasurer and comptroller, must vote on state contracts.

The 3 1/2 -year keno contract has come under fire because the state ignored its competitive-bidding procedures and negotiated the price in private meetings with GTECH Corp. of West Greenwich, R.I.

"I would welcome an investigation by the attorney general, the U.S. attorney's office, the federal government or anyone else who would like to investigate to determine if this was done in a proper fashion or if there were any illegalities or irregularities in any action that we've taken," the governor said.

He lambasted The Sun for an editorial yesterday on the keno contract that referred to "appearances of a 'sweetheart deal.' "

Mr. Schaefer proposed the game in September as part of his plan to eliminate an estimated $450 million budget deficit.

Del. Leon G. Billings, a Montgomery County Democrat who has been critical of gambling, took up the governor's challenge yesterday.

"I'm going to write to the U.S. attorney in Baltimore and ask for an investigation of the whole parameters of gambling in Maryland," he said, adding that he expected to send the letter within a week.

Mr. Billings has criticized the state for refusing to solicit prices for keno from other companies. "It stinks to high heaven," he said.

The attorney general's office has sided with the state lottery agency, which says the keno deal is simply a modification of Maryland's current contract with GTECH for its lottery computer system and terminals.

Lottery officials also say they could not solicit bids from other companies if they were to meet the Jan. 4 deadline for launching the game. The date was selected so Maryland could make money sooner to help get its budget out of the red.

GTECH won the state's lottery contract last year by underbidding the previous contract holder, Control Data Corp. of Minneapolis, by $17 million. At the time, the contract included a clause saying the winner might be asked to provide keno lottery equipment at a later date.

The high-stakes, big-dollar quest for the 1991 lottery contract prompted complaints and ultimately an investigation by the attorney general's office. "The criminal, contract and anti-trust units looked at GTECH, and there was no evidence of wrongdoing," Attorney General J. Joseph Curran said this week.

Since then, GTECH has won two modifications to its original $64 million, five-year contract that together raised its value to $120 million, a 70 percent increase.

Before the Board of Public Works voted yesterday, a Catonsville-based corporation that designs, manufactures and services lottery equipment protested that it was not given the opportunity to bid for keno.

"To our way of looking at it, the proposed $49 million sounds excessive," said Stephen D. Holniker, president of Advent Technology Inc. "In the absence of open competition, the state ++ cannot be sure that it is paying a reasonable price for the product."

In addition, E. Thomas Lattanzi, sales and corporate relations director of the Maryland Jockey Club, asked the board to delay action until it could determine what effect keno would have on horse racing in Maryland. "We cite to you the devastating impact keno has had on racing in Oregon," he said.

After Oregon launched keno last year, the money bet at horse and greyhound tracks there declined by amounts ranging from 16 percent to 63 percent, he said. His request was denied.

Two bar owners told the board it will be too costly for them to install keno equipment. "I'm not a bookmaker for the state. I'm in business for myself," said Steve Xintas, owner of the Triangle Tavern in Essex.

Another opponent to keno, the Rev. Lawrence D. Jameson of Stevenson United Methodist Church in Berlin, appealed to family values. "Keno is going to be bad for families in Maryland because it will vastly increase the number of people in our society who gamble," he said.

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