D.C. Lottery Update: CAGE Is Out; Who’s With GTECH?
Two weeks from today, bids are due on the D.C. Lottery contract.
But who will step up?
The big question is: Which local business types will each of the three major global lottery equipment providers tap for a partnership? Tapping locals earns each company points in the procurement process and also helps grease the political skids.
Last month, LL ran down the possibility that Caribbean CAGE, an outfit backed by BET founder Bob Johnson and old D.C. politico Bob Washington, might pursue the potentially lucrative contract with big fish GTECH or Scientific Games.
This week, LL got an unequivocal denial from Todd Washington: "We've taken a look at the opportunity, and we don't think it fits in our sweet spot. We just don't see it being as lucrative an opportunity."
CAGE's main business is in video lottery terminals, slot-machine-like devices; the parameters of the D.C. contract, he explains, don't offer a comparable profit margin. "We don't see how we get the kind of ROI that would interest our principals. We've spent time looking at it and running through the numbers."
But Washington says, "If VLTs come into play, that's a different situation."
So where does that leave Scientific Games and GTECH?
Scientific Games, at this point, is almost certain to partner with Charles Hopkins, a Maryland businessman and former investment banker whose main business to date has been in airport retail. He's likely to have other local partners, but they are thus far unknown.
GTECH, at this point, is a cipher. The Rhode Island-based outfit has dumped longtime partner Leonard Manning, as LL first reported last month. So they're in the hunt for a new dance partner.
LL had heard rumblings about local businessman Pedro Alfonso getting involved; last time appeared as a local partner in a gaming venture it didn't turn out well: He hooked up with Caribbean financier Rob Newell and a shady Las Vegas money man, Shawn Scott, to push a plan to place hundreds of VLTs at a New York Avenue NE slots parlor. That effort ended in disgrace, with the Board of Elections and Ethics handing Alfonso et al. a half-million dollar fine for ballot fraud. In recent weeks, his name has disappeared from chatter. Also said to be in the mix is Lorraine Green, director of the city personnel office during the Sharon Pratt Kelly administration and now VP of human resources for Amtrak. More to the point, she's close friends with D.C. Council Chairman Vincent C. Gray, who helped derail the original bid. Neither Alfonso or Green returned calls for comment.
Speaking of the original bid, that leaves Intralot, which was initially selected for the contract, along with partner W2Tech. That pick, infamously, was not approved by the D.C. Council, leaving Intralot with a dilemma.
They made noise last year about not participating in a rebid if political concerns caused interference, and proceeded to spend hundreds of thousands of dollars to have the initial award enforced. But the prospect of leaving money on the table—and, more to the point, being politically outmaneuvered by blood rival GTECH—might be too much to bear.
But if they stick with W2Tech—headed by Alaka Williams, wife of politically connected businessman Warren C. Williams Jr.—their political problem remains. In an interview last year, Intralot exec Byron Boothe to LL, “You always take home the person you brought to the dance.”
But the facts are these: If Intralot had bid without a partner last year, they still would have beat the GTECH group—the local preference points wouldn't have made a difference.
Sometimes you take someone to the dance, and sometimes you have to leave alone.