by Barrington M. Salmon
(Trice Edney Wire) – With the staggering amounts of money to be made in state lottery systems nationwide, companies vying for pieces of those pies are thrown into an exacting, cut-throat, and rough and tumble world with individuals and the firms they represent wrestling with each other as they claw for an upper hand.
The payoffs are in the millions of dollars for the entity chosen to run the respective states’ lotteries. In fiscal 2016, for example, lottery ticket sales in Maryland generated a record $1.9 billion in sales. Meanwhile, in FY 2024, the District of Columbia brought in $324 million. States with the highest sales in 2025 were New York, $10.25 billion, Florida, $9.13 billion; California, $8.93B, and Texas, $7.91billion.
In Maryland, two companies, Scientific Games and Intralot are locked in yet another bitter battle over who will be awarded the state’s very profitable contract and the right to manage Maryland’s lottery systems for the next 10 years.
It may be up to a judge to settle the increasingly muddled and rancorous dispute.
Scientific Games, the incumbent, lost the contract to Intralot on price because Intralot tendered a $260 million bid, $110 million less than Scientific Games. Intralot was subsequently disqualified over MBE certifications of two vendors not being certified at the time of submission though they were cleared by the time of the award (which is a technicality). Scientific Games may have been in the catbird seat but some industry insiders familiar with the situation note that Scientific Games had such bad relationships and a reputation of traditionally overcharging the state and under-delivering on service, that the commission voted not to award the contract.
An underlying issue was also fallout from a minority contractor that caused the lottery commission to tread lightly.
Scientific Games filed suit, asking for a judge chosen from Anne Arundel County Circuit Court to arbitrate a case SGI contends is an “unfair and illegal process” that led to the contract being stripped away. This comes after Maryland’s lottery commission voted to reverse the bid on September 25 last year. SGI’s ask is for the court to block any rebid and reinstatement of the 10-year deal to its rival. In addition, SGI also wants the judge to rule that the state doesn’t rebid the contract while it appeals.
Scientific Games contended that Maryland officials did not take into consideration the value and advantages of continuing with the company, which officials claim was exceeding revenue expectations for the state.
The new owner of Intralot says he expects these and similar challenges will be a thing of the past now that Intralot has now been placed under the umbrella of the Bally’s Corporation.
“We’re in the business of investing in what we think are good companies,” said Soo Kim, chairman of the board of directors of Bally’s Corporation, which owns and operates several casinos in the US. “Intralot had bad balance sheets, was mismanaged, had variable events and had limited resources but it has good bones as an innovative system lottery provider.”
In addition, Kim said, Intralot was over-leveraged with debt trading at 50 cents on the dollar.
“We look for innovation disrupters. We felt good because we found a technically sound company but with some employers who had a sense of belief that with no resources you may feel there’s no way out.”
Since acquiring Intralot in the summer of 2023, and making a different investment in 2025, Kim said along with Bally’s infusion of fresh resources into Intralot “and we’re just starting to fill the management team.”
“It’s too early to anticipate what level of success we’ll have but we’re very optimistic. People have a certain view of Intralot that we hope to change,” said Kim, who is the founding partner of Standard General and is the firm’s managing partner and chief investment officer. “People should give us another chance; we’re asking people to give us another chance.”
Bally’s-Intralot has the best balance sheet in lottery, Kim declared.
This new entity’s competition is Brightstar and Scientific Games. The goal now, Kim asserts is to work in ways hard and smart to become Number 1 in the lottery ecosystem.
“Currently, we are Number 3 of 3. Intralot has had very bad balance sheets for the last decade and internal and external challenges,” said Kim, who was born in Seoul, South Korea but moved with his family to Queens, New York City when he was 5. “These problems seeped into the minds of the management team. The biggest challenge is to change people’s minds externally and internally. We have had some leadership changes and we’re working to change people’s perceptions inside and out.”
For Kim and Bally’s-Intralot, past is not prologue, but a roadmap that offers officials in the new company ways to sidestep, avoid and recognize issues that have plagued them in the past.
The lottery goings-on in New Mexico for example, are an opportunity for Bally’s-Intralot to show off its ability to do the job.
Scientific Games became the new operator after a stint by Intralot ended. Based on an investigation into the changeover, the transition has been anything but smooth.
Patrick M. Brenner, president and CEO of the Southwest Public Policy Institute, criticized Scientific Games for the damage the “botched rollout” of the new gaming system has had on a variety of areas of New Mexico life.
The institute’s investigative report, “Rolling the Dice,” and an opinion piece by Brenner in the Santa Fe New Mexican, details the chaos.
“… The lottery’s procurement and transition process has been marked by delays, documentation gaps and mounting operational risks that now extend beyond the agency and into the classrooms it is meant to support,” Brenner said. “This was not a routine information technology upgrade. It was a once-in-a-decade replacement of the New Mexico lottery scholarship’s core financial backbone. The authority selected Scientific Games as its new partner because it was the lowest-cost option on paper, despite competitors such as International Game Technology scoring higher on technical merits. Compounding this error, the evaluation committee reportedly took no notes during the selection process. This administrative negligence leaves this entire transition vulnerable to litigation and provides no accountability to taxpayers.”
“The damage is already manifesting across the state, and the field reports are dire,” Brenner added.
Retailers describe a system in slow motion where ticket printing takes significantly longer than it did under the previous infrastructure. There is a total absence of Fast Play games at retail locations, and the lottery call center is effectively missing in action when clerks need help, Brenner said.
“These are not mere inconveniences for business owners. They are systemic red flags indicating a failure to adequately prepare the people on the front lines who actually generate revenue for our state,” he explained. “The deeper failure here is institutional. Public procurement is designed to balance cost, competence and continuity, especially in systems that generate revenue rather than consume it.”
A lottery gaming system is not a commodity purchase; it is a highly specialized, revenue-critical platform that requires seamless integration, retailer training and phased implementation,” said Brenner.
“When decision-makers reduce that complexity to a lowest-bid exercise, they substitute short-term optics for long-term performance. In a system where every transaction funds a student’s future, fragility is a liability,” he continued. “By rushing this transition and exhausting the legal extension limits with the outgoing vendor, Intralot, the authority has backed itself into a corner.”
“It is now precariously dependent on emergency measures just to keep the lights on and the terminals active. State law caps lottery contracts at ten years to prevent vendor entrenchment, but these repeated emergency extensions may be pushing the agency past its legal authority.”
What the New Mexico public is witnessing is “a classic procurement design failure in which a government agency knows the price of everything but the value of nothing.”
If this system fails, the savings promised by the low bid will be swallowed whole by lost scholarship revenue and legal fees, Brenner warned.
“New Mexico students deserve a lottery that works, not a high-stakes gamble with their futures,” he asserted.
Brenner was referring to the fact that 30 percent of gross sales from the New Mexico lottery is allotted to the Legislative Lottery Scholarship Fund which supports college education for residents. As of April 2021, according to the Las Cruces Sun News, the New Mexico Lottery has generated approximately $3.28 billion in ticket sales since its launch in 1996, with more than $1.79 billion paid in prizes.
In a recent interview with Brandon Vogt, Brenner said this wasn’t the first time Scientific Games had dropped the ball. He said similar problems popped up in Florida and Delaware. If he had his druthers, Brenner told the interviewer, he’d go back to Intralot.
“Do you think there would be like one of one of the off ramps here for the state of New Mexico? Just going to have to deal with Scientific Games or …”
“…Well, the contract is executed, unless they can find a way out of the contract and go back to the original vendor, which, I mean, in my humbly honest opinion, seems like the right choice maneuver here. Yeah, we’re stuck with a rather shoddy vendor,” said Brenner.
Interviewer Brandon Vogt told Brenner that since Scientific Games is flying, is it too late for the legislature to step in.
“So the keyboard shortcut for undo is Control Z, they just give it Control Z, yes, I wish they could just do that. Undo, this. This was a disaster,” said Brenner. “The problem is that the procurement process so heavily weights the contract award on price. I mean, everybody’s familiar with the term, it goes out to the lowest bidder. Yeah, I never understood that growing up.”
The contrast in what Bally’s-Intralot and its competitor offered is as different as night and day, Kim said, especially as new and robust systems are put in place.
“We are running lottery systems in Illinois, Georgia, Arkansas, Ohio, New Hampshire, Montana and Washington D.C. We are also in 23 countries – we have a very large international footprint,” said Kim. “We hope to be a share gainer-based company with a strong heritage, resources and balance sheet. I honestly believe that Intralot has the best balance sheet and credit profile of the major systems providers.”
One crucial difference between the old and new companies is that the Bally’s Corporation is that Bally’s-Intralot is MBE-certified.
“We actually are MBE-certified which will give us space, participation and access in this space. We intend to make that known and understood that Bally’s is an NMSDC (National Minority Supplier Development Council) corporation. We’re the only one. We occupy a major, major procurement space for government. We now qualify on our own. The certification came through last year.”
Kim said the new company will honor all existing contracts.
“Over time, if we need to make changes, we will.”
