Bill Myers, The Examiner
2008-05-07 07:00:00.0
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WASHINGTON -

The failure of 17 lottery machines in D.C. last week left officials scrambling to account for $2.5 million in revenue, District officials told The Examiner.

Jay Young, chief operating officer for the city’s lottery board, said the glitch automatically invalidated dozens of scratch-off lottery tickets.

At least 25 people with winning tickets worth relatively small amounts couldn’t redeem them, Young said. The city is looking into the complaints.

It also knocked out the lottery’s automated accounting system, forcing officials to add the figures by hand through the weekend.

Because of the collapse of 17 machines, the lottery’s computerized ledger showed an unexplained surplus. That meant city officials had to recheck by hand $2.5 million in lottery transactions.

“We have a very old system,” Young said. “The code breaks and malfunctions for different reasons.”

It could have been worse, Young said: If the city hadn’t been able to balance the books, it would have been required to pay any winning tickets in interstate games like Powerball out of its own pockets.

Young’s allegations come just as the District’s 25-year-old lottery vendor lobbies furiously to hang on to its lucrative contract. Young’s board has recommended ditching Lottery Technology Enterprises and its partner, G-Tech. The D.C. Council may vote on the proposed $120 million contract next week.

LTE/G-Tech spokeswoman Ann Marchant disputed Young’s assertions. She said that instant games were down in 17 places, but the rest of the system was kept up. She also accused Young and other finance officials of smearing her company so that they could award the contract to a rival.

Late last month, the D.C. finance office recommended giving a $120 million lottery contract to a partnership between a nine-month-old startup company and an international lottery conglomerate. LTE/G-Tech has hired former top city officials to protest the contract.

In 2006, LTE’s computer system was hacked, allowing people to print off nearly $80,000 in phony winning tickets. In less than a decade, such failures have led the city to fine LTE/G-Tech $450,000 in “liquidated damages,” finance office procurement director Eric Payne told The Examiner.

LTE and G-Tech have support from key members of the District Council, including Jim Graham, D-Ward 1, and Kwame Brown, D-at large. Both have said they are worried about one of the proposed new contractors, a startup company known as W2I.

bmyers@dcexaminer.com