PARLAY CROSSES SWORDS WITH CANADIAN LOTTERY

12 October 2007

Online gambling software developer wants audit of Atlantic Lotto after missing out on gaming contract


The Canadian Press reports that well known Oakville-based online bingo games developer Parlay Entertainment is questioning a decision by the Atlantic Lottery Corporation to award a contract to a Swedish company without putting the job out to tender. Parlay has called for an audit of the Atlantic Lottery process.

Atlantic Lottery officials defended heir decision, saying it did nothing wrong by selecting the best company for the job.

Parlay "didn't qualify for any facet of this contract," corporation spokesman Mike Randall said in an interview. "I don't understand what their goal is ... The Atlantic Lottery Corporation continues to be as open and transparent as we can be."

Oakville-based and publicly listed Parlay Entertainment launched a website this week that calls for more accountability within the Atlantic Lottery Corp.

The company's CEO, Scott White, argues the contract for the online bingo game, which was awarded in February to Swedish provider Boss Media, should have been open to other companies to bid on.

Parlay Entertainment, which specialises in online bingo software, also said the decision to hire Boss Media should have been announced to the public.

White denies that his company is displeased because it missed out on the contract. "Some may ask whether we are sore losers," White told a news conference in Halifax. "There was no competition for us to lose."

Atlantic Lottery said initial costs for the five-year contract are under Cdn$1 million, with no more than Cdn$2 million expected to be spent over the lifetime of the contract.

However, the corporation agreed to begin announcing when service contracts of Cdn $50 000 or more are awarded, said Randell.

Parlay's website also calls for the Atlantic Lottery Corp. to follow the Atlantic Procurement Agreement, a deal between the Atlantic provinces designed to eliminate discrimination through competitive tendering.

Leo Glavine, gaming critic for Nova Scotia's opposition Liberals, said the corporation committed to following the agreement during an appearance before the legislature's public accounts committee in January 2006.

"They committed to following ... opening tendering, more transparent processes," said Glavine, adding he's called for the corporation to appear before the legislature's public accounts committee. "This flies in the face of their own commitments."

But Randall said the corporation has its own management policy that follows the intent of the Atlantic Procurement Agreement.

The policy, posted on Atlantic Lottery's website, states the corporation can choose "to contact only one vendor, even though other vendors who can provide a similar product or service do exist ... All single source justifications will be for strong business reasons."

"It was decided ... to single source to really save Atlantic Canadians money," said Randall. "The cost of a full request for proposals ... would have run into probably millions of dollars."

Still, Glavine said the public should be able to watch the competitive processes unfold, calling this situation "another disturbing chapter in the business approaches of the ALC."

Canadian Press reports that the Atlantic Lottery has been working to restore public confidence in its operations after a study found lottery ticket retailers won big prizes 10 times more often than they should have (see previous InfoPowa reports). An audit by KPMG Forensic Inc. was ordered in June.

An earlier study found 120 customer complaints lodged with the Atlantic Lottery Corp. over five years were directly related to disputed winnings.

John Noseworthy, Newfoundland and Labrador's auditor general, said renewed calls by Parlay Entertainment for an audit would have to go through provincial shareholders before any action is taken.

"If the government of Nova Scotia has an issue, or if any of the other three shareholders have an issue, they can request their auditor general to go in," he said from St. John's, N.L.

"Other than that, no auditor general has access."

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