Executive Council approves new lottery contract

Rebecca Mahoney

Wednesday, Feb. 9, 2000 | 1:38 a.m.

CONCORD, N.H. - The Executive Council approved a six-year lottery contract with a Connecticut company Wednesday, despite a lawsuit over the bidding process by the Rhode Island company that now operates the lottery.

Autotote Lottery Corp. will take over operation of the New Hampshire Lottery on July 1 and plans to install 24-hour online lottery and instant gaming systems.

GTECH Corp., which has operated the lottery since 1991, has sued, saying the state violated its own bidding rules when it refused to renew GTECH's contract.

The fight over the contract dates back to last summer, when GTECH submitted the lowest bid for the new contract in a blind bidding process. However, negotiations broke down when GTECH refused to meet all the commission's requirements, such as operating the lottery 24 hours a day.

Officials then began negotiating with Autotote, which eventually lowered its price to match GTECH's bid.

In the lawsuit, GTECH claims its initial offer was $6 million less than Autotote's, and the state had a greater responsibility to work with the lowest bidder.

Autotote also had an unfair advantage in negotiations because it knew what GTECH's offer contained and could modify its proposal to make it more attractive, the lawsuit says. GTECH is asking that Autotote's contract with the state be ruled invalid.

Steve Horn, deputy attorney general, told executive councilors Wednesday the state is prepared to defend its contract with Autotote. A preliminary court hearing is scheduled for next Thursday.

In other business, the Executive Council voted to fund a $152,753 study aimed at finding out if tolls on New Hampshire highways can be removed.

The state Department of Transportation is hoping to determine whether heavy traffic areas, such as Daniel Webster Highway in Nashua and I-95 in Hampton, would benefit from having the tolls removed.

Councilor Ruth Griffin said she felt the removal of tolls or the implementation of electronic tolls would alleviate traffic problems on holidays and fall foliage weekends.

Councilor Peter Spaulding said he was concerned that the state would have to make up for lost toll revenue by increasing the gas tax. That would unfairly burden citizens who live in the rural and northern parts of the state, who would end up subsidizing heavy road usage by southern New Hampshire residents, he said.

Shaheen said the results of the study would be vital in deciding whether or not to remove the tolls.

"If (the study) shows us $100 million in the red and sees a dramatic increase in the gas tax, then we'd have to take that into consideration," she said. "It's appropriate for us to study what these issues are."