GTech may have to tender to renew An Post lottery contract

GTech, the US technology company at the centre of Camelot's failed bid to continue operating Britain's state lottery, will have to tender to renew its contract with An Post if it secures a new licence to run the National Lottery from next March.

The company has twice previously secured the contract to supply online data services to An Post, which has operated the lottery since 1987.

An Post's current contract, which was due to lapse last March, was extended by the Department of Finance for one year while it developed a new tendering system for the lucrative games. These generated a surplus of £125.5 million for charity last year.

GTech's contract with An Post was worth £7.64 million last year according to its accounts in the Companies Office.

The Moriarty tribunal heard last year that GTech's then chairman, Mr Guy Snowdon, had invested $100,000 in Celtic Helicopters, just months before its latest contract was renewed in 1993. Celtic is co-owned by Mr Ciaran Haughey, a son of the former Taoiseach, Mr Charles Haughey.

A year later, the company was the architect of Camelot's successful bid to win Britain's first national lottery licence. While Mr Snowdon was the driving force behind the bid, he later resigned after losing a libel case against Mr Richard Branson, founder of the Virgin group and now most likely to run Britain's lottery from next year.

Mr Branson alleged Mr Snowdon tried to bribe him to drop his 1994 bid. Camelot later bought out GTech's 22 per cent shareholding to distance itself from its technology supplier.

Ironically, it was the failure of GTech to inform Britain's national lottery commission - and Camelot - of a software glitch identified in its system in June 1998 and secretly rectified in July 1999 which has strengthened Mr Branson's hand significantly. The glitch led to mistakes in the payment of tens of thousands of prizes - the amounts involved did not exceed £3 in any instance.

While Britain's national lottery commission has asked Mr Branson to adjust his bid for the contract, it has ruled out a renewal of Camelot's licence because GTech "compromised" the integrity of the lottery.

The commission only learned of the alleged cover-up after a tip-off from a former GTech work this year.

Though this prompted the resignation of GTech's chairman, Mr William O'Connor, and its president and chief operating officer, Mr Steven Nowick, the commission said it had "significant concern" that Camelot could not demonstrate its ability to manage GTech effectively.

The report of the commission's chairman, Dame Helena Shovelton, said: "The decision by GTech to correct the fault secretly was taken personally by the former chairman and chief operating officer . . .against written advice from the general manager of GTech UK that Camelot and ????????????????????Oflot (the former regulator) should be told. Hence the integrity of the lottery was compromised."

This weekend, negotiations between the lottery commission and Mr Branson were on hold over pending a legal challenge by Camelot next week.

At the High Court in London yesterday, Mr Justice Sullivan adjourned an application for judicial review by Camelot until Tuesday on the commission's undertaking that it would not engage in talks with Mr Branson over the weekend, a bank holiday in Britain.

Camelot said it had decided to seek redress through the courts because it believed the commission's decision to negotiate solely with Mr Branson was "unfair".

In Dublin yesterday, a National Lottery spokeswoman said it had been satisfied at all times with the service provided by GTech.