AWI gambles for chance at keno Low bid to run lottery gives firm a shot at rapid-numbers game

November 20, 1995|By Marina Sarris | Marina Sarris,SUN STAFF

When Automated Wagering International offered to run Maryland's lottery games for half the current price, company officials said superior technology and leaner operations enabled them to propose the bargain-basement price.

But AWI Executive Vice President Charles Brooke has added another, more intriguing explanation of a bid so low it sent a buzz through lottery industry observers around the country.

The company, he said, wanted a chance to run its first keno operation, the rapid-fire numbers game played at bars.

"There are a lot of factors that go into price," Mr. Brooke said. "Maryland had a strategic value associated with it because it is one of the few states that currently allows fast-draw keno."

With keno under its belt, Mr. Brooke said, AWI would stand a better chance of winning contracts in other keno states and selling current customers on the game.

Last month his Atlanta-based company offered to supply and maintain Maryland's lottery computers and games for about $40 million over five years -- almost $50 million less than the only other bidder, incumbent operator GTECH Corp. of Rhode Island.

State lottery officials are investigating the proposal and expect to announce this month whether Automated Wagering can do all that it has promised. If so, the company will take over lottery operations here in July.

GTECH, the worldwide industry leader, already has filed a protest of its apparent loss. The two companies are in a bitter price war for control of the nation's lottery operations.

The huge difference in price between the bids surprised Maryland legislators, GTECH officials and financial analysts alike.

At AWI, Mr. Brooke and company President Mark L. Cushing insist they will make a profit, although they will not say how much.

None of the eight states where AWI runs lottery games offers a keno drawing every five minutes. Though AWI has the know-how to run such a game, Mr. Brooke said, "we haven't had a place to showcase that technology."

Although Maryland is relying almost solely on price in awarding its contract, most state lotteries do not. They assign points to companies based on their experience and technical aspects of their proposals. Without an existing five-minute keno game, AWI probably would not fare well under that system, said one industry observer who asked not to be identified.

Mr. Brooke said the company's lack of keno experience also makes it difficult to convince existing customers to adopt the game. "It's kind of hard for me to sell you a new car if I haven't got a demonstration model," he said.

GTECH runs the game for seven of the eight lotteries with five-minute keno. The Massachusetts lottery operates the game itself.

Keno can be a lucrative addition for contractors and states alike. After only two years in Maryland, the game accounts for almost 25 percent of all lottery sales.

GTECH spokesman Robert Rendine, who has called his competitor's price "incomprehensible," found cause for concern in Mr. Brooke's comments. "This should be very troubling news to the citizens of Maryland because they will become part of the grand experiment -- the guinea pig -- for that company," he said.

Lottery director Lloyd W. Jones said he was not worried. "I do not feel like part of an experiment. These are straight-forward programs. It's not rocket science."

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