Vendors wary of new lottery firm Sellers fear loss of 'serious money' if AWI stumbles

June 27, 1996|By Thomas W. Waldron | Thomas W. Waldron,SUN STAFF

At Maria's Carryout in Parkville, Pete Xanthakos has a lot riding on the state's new lottery contractor.

Along with the pizzas and subs his shop sells, Xanthakos does a brisk business in lottery tickets. If Automated Wagering International Inc. of Atlanta, the new Maryland lottery vendor, has problems, he has problems.

"Incomewise, the lottery gives us about $20,000 a year. That's serious money," Xanthakos said yesterday. "I don't want to see it shut down."

Like Xanthakos, the 3,800 business owners who sell lottery tickets and the countless Marylanders who buy them every day are watching warily as AWI prepares to take over the state's $1.4 billion gambling business.

AWI beat out the state's current operator, GTECH Corp. of Rhode Island, after pledging to run the games for roughly $53 million over five years -- less than half the cost GTECH proposed.

But last month, Arizona startled officials here when it fired AWI for poor performance. And this week, AWI asked Maryland officials for permission to delay its takeover of the lottery by four weeks -- to Aug. 19 -- to clear up problems making the switch.

Now, several business owners who operate lottery outlets are bracing for potential trouble ahead.

"From my end, it's a terrible sign," said Xanthakos. "I would much rather have heard they're ready to go a week ahead of time, that they're on the ball."

Said Larry Dean, manager of Beverage Depot at Harford Road and Taylor Avenue in Parkville: "I see the potential for it to be a huge screw-up for the people who made the decision" to bring in AWI. "I anticipate lots of glitches."

The sprawling liquor store has two GTECH machines selling lottery tickets, with a new pink AWI version sitting idly by on the side.

At midday yesterday, a half-dozen elderly people sat at small tables playing Keno, the rapid-fire game in which winning numbers appear every few minutes on a television monitor in the middle of the store.

Lottery outlets collect 4 percent of the ticket sales they handle and 3 percent of each winning ticket they cash.

Statewide, the average outlet rakes in about $18,300 in commissions a year, according to state figures.

At Beverage Depot, which has an unusually active lottery business, the owners took in more than $50,000 in commissions last year, Dean said.

"It's a nice sideline," Dean said. "If the system goes down, even for only four days, it would cost us $500 or $600."

If there are major problems, regular players such as Joe Blusiewicz would be inconvenienced. Blusiewicz, a 65-year-old retiree, said he usually stops by Beverage Depot for about an hour each day to play Keno and other lottery games. AWI has a stiff task ahead of it, he said.

"You've got to change every place in the state -- here, Ocean City, Frederick," Blusiewicz said. "How they're going to do it, I have no idea."

Officials from both the State Lottery Agency and AWI are trying to reassure the public -- as well as jittery lottery agents -- that the transition will be a smooth one.

"Our main goal is to make sure there is no interruption of sales and our ability to raise revenue for the state," said Carroll H. Hynson Jr., a lottery spokesman. "These 3,800 agents are the backbone of our operation. Without them, we don't survive."

In the budget year that begins Monday, Maryland officials are counting on the lottery to net $459 million for state government -- about $13 million more than this year.

That amount includes $32 million earmarked for construction of the Ravens football stadium.

AWI President Mark L. Cushing said he was confident that any problems would be ironed out before the Aug. 19 transition.

"We're extremely comfortable with that date," Cushing said. "It allows us to finish all the testing that the contract envisions.

"I think retailers [in other states] like our system very much," Cushing added. "Their sales are high, the system is fast."

Some Maryland lottery agents said that despite the delay, they look forward to the day AWI takes over the state contract.

The company has improved the graphic look of the Keno game, the agents said, and its machines won't require as much downtime for such routine chores as changing paper.

"It's kind of a change for the good," said Kenny Kang, manager of Northwood Liquors in Northeast Baltimore. "The machines seem to be user-friendlier."

Pub Date: 6/27/96

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