GTECH Corporation
| File:GTech.svg | |
| Company type | Subsidiary |
|---|---|
| Industry | Lotteries and Online gambling |
| Founded | 1980 |
| Founder | Guy Snowden & Victor Markowicz & Robert K. Stern |
| Headquarters | Providence, Rhode Island, U.S. |
Area served | Worldwide |
Key people | Jaymin Patel (CEO) |
| Products | Slot machines, Video Lottery Terminals, Scratchcards, Lottery Software, Online poker software, Online payment systems |
| Parent | International Game Technology |
| Website | www |
GTech Corporation was a company specializing in gaming technology headquartered in Providence, Rhode Island, United States. In 2006, it was purchased by Italy's Lottomatica for $4.5 billion, which later adopted the GTECH brand within the U.S. market. Subsequently, in 2015, GTECH acquired International Game Technology (1975–2015) (IGT), and the combined entity took on the IGT name. Meanwhile, Lottomatica continued to use its original brand within Italy and manages several subsidiaries.
History
Established in 1981 by Guy S. Snowden, Victor Markowicz, and Robert Stern, GTech launched with $200,000 contributed equally by the founders and the Bass Brothers, supported by advisor Richard Rainwater. The investors secured a $3 million bank guarantee; over the following 15 years, their initial capital expanded to $40 million. In 1996, Fortune magazine published multiple accusations of unethical behavior involving GTech.
In 1998, Snowden lost a defamation case brought by Richard Branson concerning alleged bribery attempts linked to the UK's National Lottery contract. This legal defeat led to Snowden's departure from both GTech and the Camelot Group. By the year 2000, GTECH commanded approximately 70% of the worldwide online gaming market and had secured 80% of online lottery contracts awarded since 1996.
By 2005, GTech managed 26 out of 36 state lotteries in the U.S., including the District of Columbia Lottery. The following year, Lottomatica acquired GTech for $6.4 billion; by 2011, Lottomatica reported revenues of €3 billion and employed around 8,000 people across 60 countries.
In 2007, allegations emerged accusing the company of bribery aimed at obtaining contracts. In 2013, Lottomatica rebranded its U.S. operations under the GTECH name.
The year 2015 saw GTECH merge with IGT in a transaction valued at $6 billion. As part of this agreement, over €40 million was paid to Italian authorities to resolve issues related to intercompany financing and suspected tax evasion connected to the earlier merger in 2006. The unified organization operates under the IGT brand and is publicly traded on Euronext Milan.
British National Lottery and Branson lawsuit, 1994–1998
Richard Branson prevailed in a defamation lawsuit against GTECH cofounder Snowden after Snowden was accused of attempting to bribe Branson to withdraw "The People's Lottery" bid—a non-profit initiative—in the competition for the UK's inaugural National Lottery franchise in 1994. Despite Snowden denying these bribery allegations, Branson’s legal action succeeded in 1998.
During the bidding process for the National Lottery franchise in 2000, errors in GTECH software led to incorrect prize payouts. The National Lottery Commission recommended awarding the franchise to The People's Lottery as a result. To ensure Camelot’s bid remained competitive, GTECH divested its shares in Camelot; Camelot retained GTECH as a supplier and ultimately secured the contract to operate the lottery once again.
Fraud Case Involving the New Jersey State Lottery, 1996
After grand jury probes across four states targeting GTECH executives under CEO Guy Snowden, national sales director J. David Smith was found guilty in October 1996 on charges including federal fraud, bribery, conspiracy, and money laundering connected to the New Jersey Lottery. Smith was sentenced to five years in prison.
Controversies Surrounding the Texas Lottery, 1992–2015
Audits and legal actions have exposed a series of issues between GTECH and the Texas Lottery, notably involving lobbying efforts by former Texas lieutenant governor Ben Barnes in 1997. Barnes stepped down from his $25,000-per-month lobbying position amid disputes and received a $26 million severance package from GTECH.
Nora Linares, the inaugural director of the Texas Lottery, was removed in 1997 following revelations of a personal relationship with a GTECH consultant; Lawrence Littwin took over her role. In 1999, then-Governor George W. Bush dismissed the lottery director who advocated for competitive bidding after uncovering evidence of corruption and disqualified GTECH from operating the Texas Lottery. However, under leadership appointed by Bush, the contract was reinstated to GTECH without a bidding process. Testimonies from both Littwin and Barnes linked GTECH to these disputes.