Lotteries are a century old form of entertainment. Archeologists have found evidence of lottery-style games dating back to the Pharaohs of Egypt. Keno is more than 3,000 years old. It was first played in China to fund the building of the Great Wall. In today's version, players typically select up to 10 numbers from a pool of 80 and attempt to match their selected set against 20 randomly-selected numbers.
History's first lottery with prize money was conducted in Florence, Italy in 1530. England estblished a lottery in 1569, and by 1612 lotteries first came to America.The Virginia Lottery funded half of Jamestown's budget. Lottery funds were used to fight the adversities of early Virginia, such as disease, fire, and famine.
Early U.S. lotteries helped fund the Colonial Army in the Revolutionary War, gallantly fighting for independence from the British, by providing arms and uniforms. After the war, these dollars paid to repair much of the damage left behind. The first state operated lottery in modern times was started by New Hampshire in 1964.
Today, 38 US states have lotteries. They have become a vital part of each state's revenues, funding a variety of programs, such as elderly care, education, and often, economic development.
Even as other forms of gaming proliferate in the U.S., consumer support for the lottery is at an all-time high. In the 34 years since the inaugural New Hampshire Sweepstakes, lotteries have grown to serve more than 210 million Americans - abou 80 percent of the nation's population, providing over 250,000 jobs and over 240,000 retailers sell lottery.
Where It All Began: A History of GTECH
GTECH badge numbers 00001 and 00002 were held by Guy Snowden and Victor Markowicz. It can certainly be debated that these gentlemen never actually wore badges (or even had badges), but the fact remains that this is where it all began: an engineer and a mathematician who had an idea to run the business of lotteries.
Back in the 1970s, Mathematica was a Princeton, New Jersey-based operations research firm. The company’s clients included big-name businesses such as Allied Chemical and Nabisco, and Mathematica was a pioneer in taking research and “computerizing” the information for its clients. For instance, Allied relied on Mathematica to keep track of all activities in the nylon fabric business for carpets and clothing, while Nabisco looked to Mathematica to determine in what order to bake the crackers, which machines to use, when to clean up, and when to sell and distribute.
Government studies and game theory were also ripe for Mathematica employees to explore, and the company’s client list included the New Jersey, Pennsylvania, and Rhode Island lotteries. This leads us back to Guy and Victor, who were the lead consultants to these lotteries regarding the formulas and distribution tactics for ticket sales.
The Dimensions of Online Gaming Begin
In 1976, Guy and Victor decided the time was right to start their own consulting business. They left Mathematica and co-founded Gaming Dimensions, Inc., a gaming software and consulting firm
Guy and Victor set up shop in the second story of a small building near the Arcade in downtown Providence to support their first client, the Rhode Island Lottery. The Lottery’s primary vendor was Datatrol, the leading supplier of online terminals and systems at the time. Gaming Dimensions was hired to support the Rhode Island Lottery’s launch of an online system using a converted point-of-sale (POS) device from a Lord and Taylor department store called the Datatrol IDT 6000.
“The first terminal pilot was in the Olde Smoke Shoppe about a block away,” recalls Tim Nyman, GTECH’s Senior Vice President of Global Services and a 1979 Gaming Systems hire. “The work at that time was a true team effort. Every time there was a problem with the terminal, everyone would run over from the office a block away to examine the terminal and help fix it. No one from the Company was ever left out because all of our employees could fit inside the Olde Smoke Shoppe.”
Gaming Systems Corporation is Created
Guy and Victor’s work on the Rhode Island Lottery launch and their solid relationship with Bob Stern, the then-Chairman of Applied Devices, which owned Datatrol, resulted in the founding of a new company. In 1979, Gaming Dimensions merged with Datatrol to form a new division called Gaming Systems. The following year, this new division was incorporated as Gaming Systems Corporation. The precursor to GTECH Corporation was formed.
Guy, Victor, and Bob (and other early hires including Don Stanford, Tim Nyman, Paul Bishop, and Mike Notardonato) then set up shop at 101 Dyer Street, above Capriccio restaurant, also in downtown Providence. The Dyer street address was the existing headquarters of Datatrol’s lottery division.
The new company now had three clients: Michigan, Connecticut, and Rhode Island. Two important product sales in Canada for the Atlantic Lottery Corporation and Western Canada Lottery Corporation soon followed and the business was taking off.
Gaming Systems had a vision. The company had developed a new central system to run the games – Gaming Online Software (GOLS) – but there was a missing link. A dedicated lottery terminal was needed in order to fully service the growth of the industry.
Gaming Systems primary competitors (AWI and AmTote) were using converted off track betting (OTB) devices in their sites of New York and New Jersey. These solutions worked, as did Datatrol’s IDT 6000, but it was time for something new to take the industry to the next level
For the next year, the majority of key personnel at Gaming Systems congregated at 101 Dyer Street to develop a new terminal. A Radio Shack TRS 80 computer (affectionately called a “Trash 80”) was taken apart and “bread boarded.” The mother board was removed and its components were literally screwed onto a piece of plywood. This enables the team to hook up different printers and power supplies, and interchange parts to see what worked best.
The end-result: the GT-101 was introduced in 1982. The “GT” stands for gaming technology, and the “101” was in honor of the terminal’s birth site – 101 Dyer Street. Tim vividly recalls a conversation with Don Stanford. “We were commenting that if we ever were to build and install 10,000 of these terminals, it would really be something big.”
As it turned out, the creation of the very first dedicated lottery point-of-sale (POS) terminal was a major coup. It was designed from the ground up specifically for lotteries and led the way for a significant Gaming Systems win: New Jersey.
The New Jersey Win
In June 1984, GTECH won the New Jersey Lottery contract. This win put GTECH on the map. Prior to New Jersey, Gaming Systems was known as a small state specialist. New Jersey made Gaming Systems a player and a contender for the larger lottery contracts and gave the company real credibility to go after even bigger contracts. The rest, as they say, is history.
Gaming Systems Corp. Becomes GTECH Corp.
In 1983, Gaming Systems went public on the NASDAQ exchange. However, the underwriters insisted that the word “technology” be included in the filing for the new company name. As a result, Gaming Systems changed its name to GTECH, short for Gaming Technology.
The excitement of working for such an up-and-coming company in an industry with such huge growth potential was palpable to all who worked for GTECH. Tim Nyman recalls an early breakthrough that occurred when a small group was sitting around the conference table. “There we were, brainstorming, when, literally, a light bulb went off,” recalls Tim. “The concept of putting a bar code on a ticket and re-reading the ticket through the terminal reader to validate it was thrown out there for discussion.” Problem solved. “The excitement of creating something so new was a major driver for all of us,” adds Tim. “We loved what we were doing, and were able to develop solutions quickly and creatively.”
Another story worth repeating is the creation of the European central system development – EuroGOLS. One of GTECH’s leading software developers put together the early design of EuroGOLS on a napkin while out to dinner one night and referred to it quite often. These are the kinds of differentiating actions that made this new company work. It was a small, flexible, hard-working group who were committed to finding solutions that no one else had discovered yet.
The development of GTECH’s second incarnation of a dedicated online lottery terminal was a major project as well. In 1984, California legalized the lottery and the contract was up for bid. GTECH was vying for the contract and wanted to fool the competition into thinking it was developing a high-end, costly, new terminal to include in the bid.
Guy Snowden decided to give this new terminal a code name because its development was sure to leak out to the industry at large. He wanted everyone to think this new terminal was going to be the “Cadillac” of all terminals and, therefore, cost the company a lot of money to develop. Guy anointed the terminal the “Tiffany” to evoke the high-end jewelry retailer and to imply a high-cost, high-end solution. In actuality, the Tiffany would be GTECH’s low-cost, super fast, terminal solution for the California bid.
California had a huge retailer POS presence, and GTECH’s Tiffany terminal gave GTECH a major pricing and margin advantage. GTECH won the bid.
The Tiffany was a significant benchmark for GTECH. The system speed and improved communications – combined with the new Tiffany POS – finally made high-volume lottery production possible. The Tiff was a winner, and both the name and the terminal stuck. Tens of thousands of Tiffs (or GT-401s) serviced dozens of lottery jurisdictions for years to come.
Full Speed Ahead
The next two decades saw many other major developments for GTECH. The Company introduced Quick Pick in 1982, which now represents 35 percent of the world’s lottery purchases. In 1985, GTECH was the first to develop and introduce lottery-specific communications systems, a major communications break-through. Using radio technology, GTECH installed a narrowband Ultra-High Frequency (UHF) radio communications system.
In 1990, GTECH designed and manufactured Spectra®, the first international online POS terminal with an imaging reader. The Isys® terminal made its debut in 1995, as did the EZExpress, a self-service lottery kiosk that allows customers to purchase online games, check tickets, and receive a voucher without retailer assistance.
The Altura terminal was launched in 1997 as the Company’s first open architecture, PC-based touch screen POS device built for future expansion into new games and non-gaming applications. Altura is used by lotteries around the world today. A year later, PlayerExpress® was introduced as a self-service terminal designed for the multi-lane retail environment. GTECH developed the world’s first rewritable and reusable player card, the Aladdin card, in 1999.
Central systems have also come a long way since the 1979 development of GOLS. EuroGOLS was developed in 1990 and ProSys® in 1994. In 2001, GTECH developed GTECH Enterprise Series™, a new standard of open architecture environment that allows lotteries to grow with the new possibilities of the future.
In 2002, GTECH introduced the Altura Self Service Terminal (SST), a member of our “Altura Family of Point-of-Sale Products.” The following year, GTECH introduced a process for third-party vendors with value-added technology to be ES Approved™ and to work with the GTECH Enterprise Series to achieve “best-in-class” solutions.
The last few years have been the years of the games. It’s all about content these days, and GTECH is forging ahead with the best in the business. In 2004, GTECH’s HotTrax™ game went live in Rhode Island. In 2005, GTECH introduced its newly-developed Pick ’n Play™ games, which bring visibility to new and existing online games. Today, more than 50 other gaming options have been developed for our growing customer base. What a ride.
A Return to Providence
This fall, GTECH returns to its roots in Providence. The new headquarters building is situated a bit north of its former home of 25 years ago; however, the downtown landscape is quite different. Fittingly, the City of Providence has evolved and grown just as magnificently as GTECH. The next chapter of GTECH promises to be as exciting as the first.