GTech Holdings has ousted its two most senior directors following allegations that the world's largest lottery systems supplier covered up faults in equipment it provided to Camelot, the operator of the UK National Lottery.
Chairman and chief executive Mr William O'Connor and president and chief operating officer Mr Steven Nowick quit yesterday according to the company. GTech, the largest operator of lottery systems globally, also announced that its profits for this year would fall short of forecast.
The US group has had a multimillion pound contract to operate the National Lottery in the Republic since 1987. Last year it emerged at the Moriarty tribunal that Mr Guy Snowden, a former chairman of the company, invested $100,000 in Celtic Helicopters, just months before the GTech contract was renewed to run until March of this year.
Celtic Helicopters was the aviation company run by Mr Ciaran Haughey, the son of the then Taoiseach, Mr Charles Haughey. GTech is due to introduce a online lottery game with the National Lottery later this year. Mr W Bruce Turner, a member of the GTech board had been appointed as non-executive chairman, effective immediately, the company said yesterday. The board was dissatisfied with Mr O'Connor's handling of a 1998 lottery terminal software malfunction in Britain, the statement said.
GTech identified the problem in June 1998 and corrected it in July 1999. However, it did not tell Camelot, the operator of the UK National Lottery.
The London Independent on Sunday newspaper reported that the glitch had caused thousands of lottery winners to be either underpaid or overpaid.
The board was also unhappy with GTech's stock performance, the statement said. GTech's shares have been stagnant for months. They have traded between $23 and $18 in the last year.
The company forecast lower-than-expected earnings for the second quarter and the year to 2001. GTech will take a special charge against second-quarter earnings for Mr Nowick and Mr O'Connor's resignations.
The company blamed the shortfall on "recent unfavourable developments" on lottery contracts in Rhode Island, where it is based, and Colombia, and on cost overruns on system implementation projects.
GTech supplies or operates lotteries for 80 customers in 36 countries, and runs more than 75 per cent of all US lotteries.
