Enveloped in neon lights, murmuring crowds and the tinny melody of computerized games, a convention center showroom here bears the trappings of a Las Vegas casino. But the players, mostly state employees sporting suits and name tags, haven’t come to this annual expo to gamble. Instead, they are sampling the wares of one of government’s biggest cash cows: lotteries, which rang up about $202 billion in sales last year in the United States and overseas.
Amid sales pitches and glad-handing, there’s also no mistaking which two companies dominate the landscape of government-backed gambling. Commanding the showroom’s entrance, with a booth mocked up as a convenience store featuring a Mega Bucks ticket dispenser, is the Scientific Games Corporation. Dominating the center of the hall, beneath a twirling orange and blue globe, is Gtech Holdings, its vaunted sales team strolling through a labyrinth of gleaming lottery terminals.
“You can pretty much look at the size of the booths as a guide to which companies have the most muscle in the industry,” says David Gale, executive director of the North American Association of State and Provincial Lotteries, a sponsor of the event, called World Meet. “As you can see, nobody even comes close to Gtech and Scientific Games.”
Over the last three decades, Gtech and Scientific Games have jointly generated several billion dollars in revenue as vendors to lotteries — a business that flourishes at the crossroads of capitalism and public policy. In the process, the companies have steadily — and often controversially — evolved from minor suppliers into an influential oligopoly with a hammerlock on lottery operations.
Every business has its titans, of course. But according to analysts, lottery officials and public documents, Gtech and Scientific Games have done more than just ride the gambling boom — they have strong-armed their way to the top of a publicly sponsored industry that they now dominate. And with the domestic lottery market plateauing, both companies are focused on securing new footholds overseas.
Saturday, October 20, 2007
the lottery's biggest winners
No, it's not the winners of the $300+ million jackpot who draw the lion's share of the lottery's wealth.