Lottery.....Richard Rainwater

HISTORICALLY an underground operation run by mobsters and known as “the numbers,” the informal street game has been transformed into a lucrative, state-sponsored corporate enterprise — largely through the efforts of Gtech and Scientific Games, analysts say.

Scientific Games was founded in 1973, and Gtech opened its doors eight years later, at a time when state lotteries were still in their infancy. Only 13 states had lotteries, which were generally operated as small back-office operations and run by political appointees who usually had experience in law enforcement.

Gtech was guided by one of the company’s three co-founders, Guy Snowden, a blustery former I.B.M. engineer, who had talked the Bass brothers of Texas and the investor Richard Rainwater into bankrolling a business devoted to winning state lottery contracts and operating them for a hefty commission. Mr. Snowden’s pitch to state lotteries was simple: Gtech could start up lotteries faster and operate them more efficiently and with a higher level of security than state agencies could. Within a decade, Gtech had won nearly half of the nation’s online lottery contracts.

......................Published: Sunday, October 21, 2007

Divide and Conquer: Meet the Lottery Titans
RON STODGHILL and RON NIXON