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Virginia Lottery Creates Strategic Partnership; Contract Expected to Increase Profits for Public Education (K-12) Lottery's New Business Partner Expected to Increase Sales and Provide Millions in Operating Cost Savings RICHMOND, Va., June 16 /PRNewswire/ -- The Virginia Lottery today confirmed the signing of a new contract with Oberthur Gaming Technologies Corporation (OGT), who will partner with GTECH Holdings Corporation (NYSE:GTK) to provide instant ticket products, equipment, and related services. This strategic partnership is expected to increase sales of Virginia Lottery instant tickets while lowering the Lottery's operational costs. The new contract, awarded after a competitive procurement process, spans an initial 7-year period and includes renewal options for three years. "Today marks a significant milestone in our history," said Virginia Lottery Executive Director, Penelope W. Kyle. "This new contract represents a strategic partnership combining 16 years of Virginia Lottery experience with the global industry experience of OGT and GTECH, two premier suppliers of lottery tickets and technologies. Together, both companies bring more than 50- years of lottery industry experience to the Virginia Lottery's mission to support Virginia's public schools, kindergarten through 12th grade." On January 13, 2004, the Virginia Lottery issued a Request for Proposals (RFP). The RFP sought a comprehensive solution for the Virginia Lottery's instant ticket products and related services. Potential contractors were asked to submit proposals explaining how their company would manufacture, warehouse, distribute, and assist with marketing and selling Virginia Lottery instant tickets. The OGT and GTECH partnership was created to fulfill the Lottery's requirements. Due to the comprehensive proposal, the Lottery's operating expenses related to its instant ticket operations are expected to be significantly reduced. The estimated initial 7-year contract savings could exceed $40 million. The new services provided by OGT include an exclusive contract to print instant ticket products and to provide on-site marketing support. "At OGT, we are extremely proud to have been awarded 100% of the Virginia Lottery business and to have the opportunity to continue providing the Lottery with innovative products and strategic support to ensure the continued growth of their instant product line. We are excited about our partnership with GTECH and the dynamic team we have in place to ensure a smooth transition," said Emmanuele Cousineau, Chairman of the Board and CEO of Oberthur Gaming Technologies. "OGT has been supplying instant tickets and marketing services to the Lottery since 1997 and recently finished the installation of OGT's GOLDS (Global Operations and Lottery Distribution System), as part of a separate long-term contract. GTECH is a world leader in cooperative services and Instant Ticket Vending Machines (ITVMs), development and implementation, and our new contract is an expression of the Virginia Lottery's confidence in our companies' combined expertise and ability to deliver the highest quality products and related services." "To meet the Virginia Lottery's changing requirements, GTECH, in partnership with Oberthur, provided a comprehensive and cost-effective solution to the Lottery's instant ticket lottery operations," said GTECH President and CEO W. Bruce Turner. "We are committed to assisting the Lottery in its efforts to maximize revenues for public education in Virginia." Upon execution of the contract, GTECH will initially deliver 445 Expandable Dispensing System Quad Burster(TM) (EDS-Q) ITVMs. The new machines will replace a portion of the 1,500 machines already in operation. The Lottery has the option to expand the number of ITVMs over time. GTECH will also work closely with the Virginia Lottery's marketing and sales teams to assist in performing optimization analyses to ensure the strategic placement of ITVMs to maximize the return on investment. GTECH has been the online lottery terminal provider for the Virginia Lottery since 2000, and currently provides field services for the Lottery's Clerk-Activated Terminals(TM) (CATs), Self-Service Terminals(TM) (SSTs), Instant-Ticket Validation devices (ITVs) and printers, and ITVMs. With respect to its proposed subcontract with OGT, the company expects to generate revenues of approximately $25 million over the 7-year contract term. In addition to changes OGT will bring to the Virginia Lottery's operations, the new contract also changes the method of compensation for the Virginia Lottery's newest vendor. OGT's contract with the Lottery and subsequently its alliance with GTECH will be supported on a "pay for performance" fee structure. OGT will be compensated based on 1.1325% of the Lottery's instant net sales (in FY03 the Lottery sold over $543 million in instant tickets). "The 1.1325 percentage of the net sales of our instant products is one of the lowest comprehensive instant ticket products and services rates in the Lottery industry. Our ability to garner such a rate reflects favorably on the reputation of the Virginia Lottery," said Kyle. "OGT and GTECH analyzed our sales history and our potential for growth. The efficiency of their rate shows the companies' confidence in our past efforts and our ability to keep our instant ticket sales on an upward trend." "We are confident our decision to enter into a strategic partnership with these vendors will be rewarding for all Virginians," said Kyle. "When a player buys a Virginia Lottery ticket, it's a source of entertainment; however, behind the scenes, the Lottery is a business. We have challenged OGT and GTECH, and we expect them to help us grow. When our profits increase, these companies will share in that growth and so will thousands of public school students across the Commonwealth." Oberthur Gaming Technologies is a world leader in the instant lottery ticket industry and currently supplies products and services to 100 clients in some 50 countries. The company, which is focused on growing its customers' sales in their unique markets, has offices in Montreal, Canada; San Antonio, Texas; Atlanta, Georgia; Harleysville, Pennsylvania; Paris, France; Vienna, Austria; Curitiba, Brazil; and Sydney, Australia. For more information about the company, please visit OGT's website at http://www.oberthurgt.com/. GTECH, a leading global information technology company with over $1 billion in revenues and more than 5,500 people in 45 countries, provides software, networks, and professional services that power high-performance and 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/. All Virginia Lottery profits go to public school education, K-12. In fiscal year 2003, the Lottery turned over more than $375 million for education in the Commonwealth of Virginia. For more information on the Virginia Lottery visit http://www.valottery.com/. DATASOURCE: Virginia Lottery CONTACT: Ed Scarborough of the Virginia Lottery, +1-804-692-7771 Web site: http://www.valottery.com/ http://www.oberthurgt.com/ http://www.gtech.com/

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