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GTECH CORPORATION SIGNS CONTRACT WITH MINNESOTA STATE LOTTERY, FOLLOWING COMPETITIVE PROCUREMENT
Company to Deliver Its First-Ever IP Network and IBM Enterprise Series Solution
(West Greenwich, Rhode Island -- June 7, 2002) GTECH (NYSE: GTK) today announced that the Company has signed a contract to provide the Minnesota State Lottery with new online lottery equipment, technology, and services. As previously announced, GTECH was selected following a competitive procurement that included the vendor of the Minnesota Lottery's existing online system. The integrated services contract commenced on June 6, 2002, and will continue until February 9, 2008, with the option for the Lottery to extend the contract for up to five additional years.
"We're extremely pleased to have the opportunity to establish a partnership with the Minnesota State Lottery, a highly-regarded organization in the lottery industry," said GTECH CEO and President Howard S. Cohen. "We look forward to putting our experience and commitment to this new business relationship by providing the Minnesota State Lottery with a very secure and robust open architecture gaming platform, end-to-end use of open architecture standards and applications, and a wide-open platform that will support an endless number of new gaming and retail solutions."
Under the terms of the contract, GTECH will replace the previous vendor's proprietary system architecture with GTECH's Enterprise SeriesTM architecture, featuring IP web component technology. Enterprise Series embraces a new industry paradigm for design and integration of secure lottery networks and open applications. The GTECH Lottery Engine will be based on IBM hardware and the AIX UNIX operating system.
In addition, GTECH will replace the Minnesota State Lottery's existing communications network with a sophisticated, IP-based satellite communications system which provides highly secure and reliable communication between a central hub and lottery retailers.
The Lottery also intends to replace its current terminal equipment with up to 3,700 GTECH Altura® terminals. The Altura offers high-performance PC architecture and advanced software capabilities that facilitate the rapid introduction of new games and future lottery applications. The Altura terminal introduces a wide variety of innovative features including a high speed imaging reader, a thermal printer, applications written in the Java programming language under a Linux operating system, and the Aladdin® card which offers exciting new content for players.
GTECH will operate from a data center in metropolitan Minneapolis-St. Paul, to provide a variety of ongoing services to the Minnesota State Lottery under the contract, including the operation and maintenance of the online central system, lottery terminals and communications network, field services, marketing support, hotline operations, and retailer training. GTECH anticipates launching the new system in February 2003. With respect to its contract with the Minnesota State Lottery, GTECH anticipates generating revenues of approximately $38 - $40 million.
In its fiscal year ended June 30, 2001, the Minnesota State Lottery generated over $366 million in online and instant-ticket sales. Proceeds from the Minnesota State Lottery are allocated to several worthwhile causes, including the Environment & Natural Resources Trust Fund, the Natural Resources Fund, the Game & Fish Fund, and the State General Fund.
Certain statements contained in this press release are forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements include, without limitation, statements relating to the prospects and financial outlook for the Company, which reflect management assumptions regarding: (i) the future prospects for and stability of the lottery industry and other businesses in which the Company is engaged or expects to be engaged, (ii) the future operating and financial performance of the Company (including, without limitation, expected future growth in revenues, profit margins and earnings per share), and (iii) the ability of the Company to retain existing business and to obtain and retain new business. Such forward looking statements reflect management's assessment based on information currently available, but are not guarantees and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in the forward looking statements.
These risks and uncertainties include, but are not limited to, those set forth above, in the Company's subsequent press releases and on Reports by the Company on Forms 10-K, 10-Q and 8-K, and other reports and filings with the Securities and Exchange Commission, as well as risks and uncertainties respecting: (i) the potential impact of extensive and evolving government regulations upon the Company's business; (ii) the ability of the Company to continue to retain and extend its existing contracts and win new contracts; (iii) the possibility of slower than expected growth or declines in sales of lottery goods and services by the Company or the Company's customers; (iv) exposure to foreign currency fluctuations; (v) risks and uncertainties inherent in doing business in foreign jurisdictions; (vi) the relatively large percentage of the Company's revenues attributable to a relatively small number of the Company's customers; (vii) the fact that several of the Company's larger contracts are to be rebid within the next 12 months; (viii) the possibility of significant fluctuation of quarterly operating results; (ix) the intensity of competition in the lottery industry; (x) the possibility of substantial penalties under and/or termination of the Company's contracts; (xi) the ability of the Company to respond to technological change and to satisfy the future technological demands of its customers; (xii) opposition to expansion of lottery and gaming; (xii) the Company's ability to attract and retain key employees; and (xiii) the possibility of adverse determinations in pending legal proceedings.
GTECH, a leading global information technology company with $1 billion in revenues and 4,500 people in 44 countries, provides software, networks, and professional services that power high-performance, transaction processing solutions. The Company's core market is the lottery industry, with a growing presence in financial services transaction processing. For more information about the Company, please visit GTECH's website at http://www.gtech.com.