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Issue Date: Vol. 50, No. 10, October 2010, Posted On: 9/16/2010

IGB Cancels Scientific Games VLT Contract

Marcus Webb
Scientific Gaming Corp., Michael Chambrello, SciGames, Illinois video lottery, Illinois video poker, Illinois gaming market, Illinois Gaming Board, Illinois Coin Machine Operators Association, coin-op news, amusement machine operator

CHICAGO -- In another setback for the already-delayed Illinois videogame lottery market, the Illinois Gaming Board canceled its contract with Scientific Games Corp., which was previously awarded the $89 million contract to design, produce and administer the central computer system that will link and control VLT terminals. See story.

IGB officials said they would rebid the contract immediately.

The agency said it had discovered "miscalculations" in its bid evaluations, partly based on mistaken instructions issued by IGB, according to SciGames, as it's sometimes known. The upshot was that both IGB and applicants were working from different sets of assumptions.

SciGames president Michael Chambrello expressed disappointment in IGB's decision, but also voiced confidence that his company is well placed to win the second round of bids.

IGB's review of its bid evaluation and reward process was prompted by protests from a defeated bidder.

When Illinois Gov. Pat Quinn signed the Video Gaming Act in July of 2009, many industry members were hopeful that the VLT market could launch in 2010. But a series of delays have pushed the projected launch date to mid-2011 or later.

Many of the delays have been caused by the state Legislature's failure to authorize funds for some of IGB's essential operations The resulting delays include the hiring and training of inspectors and creating a central VLT computer system and guidelines for specifications for VLT machines in the licensing process.

According to an industry official close to the Illinois VLT market, only 28 operators so far have submitted licensing applications, with the $5,000 fee, which the IGB released in late may. Fifteen companies have applied for equipment distributor licenses. And the number of manufacturer licenses applied for is fewer than distributors, the source said.

Chicago's failure to approve operator-run VLTs in the state's largest metropolis is another setback. See story.

The Illinois Coin Machine Operators Association has an online factsheet about the Video Gaming Act.

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