PHOENIX SUN STAFF WRITER WILLIAM F. ZORZI JR. CONTRIBUTED TO THIS ARTICLE. — PHOENIX -- Citing poor performance, the Arizona Lottery dumped the company yesterday that will be taking over Maryland's $1 billion-a-year lottery business.
In a drastic step, the lottery commission voted unanimously to terminate its 6-month-old contract with Automated Wagering International after frustrated members learned that it would take another six months for the computer system to be working properly.
The computer system Arizona rejected is very similar to the one AWI plans to install for the Maryland Lottery in July.
In fact, the Maryland system will be somewhat more complicated than the one in the Grand Canyon State because it will include a keno game. The Atlanta-based AWI has never before run a keno game like Maryland's.
Maryland lottery officials seemed unfazed last night by the news about the company, which is preparing to take over the state lottery operation from GTECH Corp. in July.
Lloyd W. Jones, director of the Maryland Lottery Agency, said that AWI has been performing in accordance with the contract and has given state officials no reason for concern.
"Our contract provided for many more checkpoints and test points, and a little longer period for conversion," Jones said. "We don't anticipate any problems and haven't had any up to this point.
"Anything can happen in the business world, but at this point, they are not in a breach of contract in any way," Jones said. "They have a $30 million performance bond, and we have severe penalties in the contract for any time they trip."
AWI Senior Vice President Charles A. Brooke declined to comment on the loss of the Arizona contract yesterday. He said his company, which provides computers and games for seven other state lotteries, will issue a statement shortly.
He said earlier this week that Maryland would benefit from AWI's experience in Arizona because his company has worked out the bugs in that system.
AWI has had troubles since it took over the Arizona contract Nov. 1. Its computers broke down too often, failed to validate some winning instant tickets, and made it impossible for the state to collect instant ticket receipts from stores for several months, lottery officials said.
In one embarrassing moment, a software glitch prevented lottery computers from selling tickets for one game on Leap Day, Feb. 29.
The company fixed the major problems by spring, but the system continues to be troubled by faulty software, lottery officials said yesterday.
Some retail stores have complained loudly about the computers, saying that they are unreliable and difficult to operate.
"This is one of the worst machines in lottery history, not only in Arizona but in the United States," said Syed Arefin, 35, assistant manager of a Circle K convenience store in Tempe, Ariz.
Some store clerks, however, say they like the new machines.
Arizona Lottery Executive Director Sandy K. Williams said she did not know how the problems have affected ticket sales. "I don't have accurate figures for you," she told the commission.
GTECH, the Rhode Island lottery computer giant, has told Arizona it can return within 60 days to take over computer operations, she said.
GTECH lost the Arizona and Maryland contracts to AWI last year in a price war between the two arch-rivals. Together, GTECH and AWI have a virtual lock on lottery computer contracts in the country.
In Maryland, AWI will provide and service the computers that run Maryland's games for about $53 million over five years -- less than half of what GTECH had offered.
The computer system AWI offered to Maryland and Arizona is supposed to be an advance in lottery technology. It is in varying degrees more complex than the systems it provides Delaware, Florida and other states.
Maryland Lottery Director Jones said that in addition to the bond and penalties, the state is being assisted in evaluating the AWI products by the Battelle Memorial Institute, renowned for its expertise in lottery matters.
Jones pointed out that Maryland, which has one of the oldest state lotteries in the nation, has an experienced lottery staff that has been working closely with personnel from AWI and GTECH.
He said that unlike in Arizona, where "there's a lot of bad blood," AWI and GTECH officials in Maryland are working "hand in glove" here to ease the transition.
"We're all holding hands. It's very amicable," Jones said. "GTECH is working with us very well, sharing information."
The Maryland contract was approved in December by the state Board of Public Works, which consists of the governor, comptroller and treasurer.
Efforts to reach Maryland Comptroller Louis L. Goldstein and state Treasurer Richard N. Dixon were unsuccessful last night. Gov. Parris N. Glendening is overseas on a trade mission.
Pub Date: 5/09/96
