New $30 million bond issued for firm that runs Md. lottery AWI 'insurance' policy protects state from losses

December 05, 1996|By Marina Sarris | Marina Sarris,SUN STAFF

The company that runs the Maryland lottery has obtained a new $30 million bond guaranteeing its performance here, ending weeks of concern that the state would be without such "insurance."

The contractor, Automated Wagering International Inc. of Atlanta, said in October that the insurer would not renew the bond when it expires tomorrow because the amount was too high.

But the lottery and state legislators had insisted that AWI ob- tain another bond, as its contract requires.

Yesterday evening, lottery Director Buddy W. Roogow said he had received a fax of a one-year, $30 million bond that takes effect tomorrow.

The bond protects the state's $1 billion-a-year lottery business if AWI performs poorly. The state requires the bond as a form of insurance, to make sure it gets its revenue even if, for example, AWI's computers cannot sell tickets.

"AWI has made it clear that it believes, in the long run, a $30 million performance bond is excessive and unnecessary. But this year, I insisted," Roogow said.

The new bond should increase public confidence in the lottery, Roogow said.

"This contractor is here to stay, is performing in accordance with its contract and has the financial capability to continue that performance," he said. "People should be confident that the lottery will continue to operate as a very strong financial resource for the state."

The lottery and AWI have had their share of troubles this year. Some lottery players and retail merchants have complained that AWI's new lottery machines often break down or operate slowly. Legislators are worried about an 8 percent decline in ticket sales since July 1.

AWI officials could not be reached last night. One company official has said the state might not need such a high bond because AWI carries a separate insurance policy covering poor performance.

Roogow said lottery sales have stabilized but still are below last year's level. "We've seen some increases in the past few weeks, but that is too soon to call a trend," he said.

As of last month, the lottery was predicting that its revenue would fall $30 million below the $415 million originally projected for the current budget year.

Pub Date: 12/05/96

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