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GTECH SELECTED BY THE VIRGINIA LOTTERY TO PROVIDE NEW LOTTERY CENTRAL SYSTEM, TERMINALS, COMMUNICATIONS NETWORK, AND ONGOING SERVICES
WEST GREENWICH, RI - (May 22, 2006) - GTECH Holdings Corporation (NYSE: GTK) today announced that its wholly-owned subsidiary, GTECH Corporation, has been selected as the apparent successful vendor by the Virginia Lottery to provide a new lottery central system, new terminals, and a new IP wireless communications network, under a proposed seven-year integrated services contract. Today's announcement follows a competitive procurement and includes three one-year extension options.
"The Virginia Lottery has successfully managed its systems and products that have produced outstanding results for nearly 18 years, and we understand that maintaining the Lottery's high level of operational quality is the cornerstone of the trust and respect upon which their success is predicated," said GTECH President and CEO W. Bruce Turner. "We are pleased that the Lottery has placed its confidence in GTECH to assist them in modernizing their systems and business management capabilities, and we look forward to this collaborative partnership in the years to come."
Under the terms of the proposed contract, GTECH will convert the Lottery's existing online central system to the GTECH Enterprise SeriesT solution. In addition, GTECH will replace the Lottery's existing terminal base and install up to 5,250 Altura® terminals. The Company will also install a new IP wireless communications network.
GTECH will also provide the Virginia Lottery with 225 GamePointT machines , the Company's all-in-one instant and online lottery self-service solution. Additionally, 250 Express Point PlusT machines will be installed, which facilitate convenient player-activated identification of winning tickets.
GTECH will provide ongoing services to the Virginia Lottery including installation, operation, and maintenance of the online central system, terminals, and communications network; on-site marketing support; in-state hotline management; and field service.
"This partnership is exciting for the Virginia Lottery, our retailers, and players," said Virginia Lottery Interim Executive Director Donna M. VanCleave. "The Virginia Lottery has successfully operated its own gaming systems since 1988 when we began selling tickets. This new strategic business model will leverage technology to spur profitability for our retail partners, better serve our players, and ultimately, generate more revenue for Virginia's public schools."
GTECH is the online lottery terminal provider for the Virginia Lottery and currently provides field service for the Lottery's Clerk-Activated TerminalsT (CATs), self-service terminals, Instant-Ticket Validation devices (ITVs), printers, and Instant Ticket Vending Machines (ITVMs). As a subcontractor to the Lottery's instant ticket vendor, GTECH is also responsible for the warehousing and distribution of instant tickets in addition to supplying ITVMs.
Since its inception in 1988, the Virginia Lottery has generated revenues of more than $15 billion. The Lottery has set sales records for the past seven years with overall sales surpassing $1.33 billion in fiscal year 2005. All profits from the Virginia Lottery go to K-12 public school education in the Commonwealth. In fiscal year 2005, the Lottery turned over more than $423 million for Virginia's public schools, representing about 10 percent of state funding for public education in Virginia.
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. The Company identifies forward looking statements by words such as "may," "will," "should," "could," "expect," "plan," "anticipate," "intend," "believe," "estimate," "continue," or similar words that refer to the future. 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 and gaming 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 possibility of significant fluctuation of quarterly operating results; (viii) the intensity of competition in the lottery and gaming industries; (ix) the possibility of substantial penalties under and/or termination of the Company's contracts; (x) the ability of the Company to respond to technological change and to satisfy the future technological demands of its customers; (xi) 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 is a leading gaming technology and services company. With more than $1.3 billion in annual revenues and 5,300 people in over 50 countries, GTECH provides integrated technology, creative content, and business services to effectively manage and grow today's evolving gaming markets. In targeted emerging economies, GTECH also leverages its operational presence and infrastructure to supply commercial transaction processing services. For more information about the Company, please visit GTECH's website at http://www.gtech.com.