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Controversial Md. Lottery Director Confirmed by Divided Senate

Maryland’s senate Monday evening confirmed Governor Larry Hogan’s controversial nominee to run Maryland’s lottery.

The vote to confirm interim lottery director Gordon Medenica was 27 for to 17 against.

Maryland’s Legislative Black Caucus fought the nomination bitterly, claiming Medenica comes to the agency with serious conflicts of interests, and little commitment to upholding Minority Business Enterprise requirements.

Medenica was an executive for a company partially owned by Scientific Games (SGI), which is on track to continue operating Maryland’s Lottery despite being the high bidder by more than $50-million.

A spokesman for the Lottery agency called any questions about Medenica’s ethics “preposterous."

Letter to Executive Noms Committee by wusa9 on Scribd

Prince George’s County Senator C. Anthony Muse says the future integrity of Maryland Lottery Games could be at risk because of Medenica’s alleged conflicts of interest.

“The company that he’s bringing here is the company that he worked for,” said Senator C. Anthony Muse, who represents southern Prince George’s County.

Medenica is a former executive of Northstar New Jersey, a company established and partially owned by SGI, the Las Vegas based contractor that has run Maryland’s Lottery games since 1995. SGI owns 15% of Northstar NJ, according to SGI spokesman Susan Carthwright. SGI is currently the leading candidate for the next $550 million dollar contract to continue running the games.

Maryland’s Legislative Black Caucus raised questions about Medenica in a letter to the Maryland Senate Committee considering his nomination citing “apparent opposition to diversity and inclusion” as well as “conflicts of interest”.

The letter raises concern about an unfolding scandal in Illinois. SGI also has an ownership interest in a company that has been accused of shutting down some scratch off games before all grand prizes had been awarded.

Medenica had no role in the Illinois contract or the company linked to SGI that held it, according to Amelia Chasse, a spokesperson for Governor Larry Hogan’s administration.

Response Exec Noms Comm Letter February 2017 by wusa9 on Scribd

Thursday, Muse said he feared for the future integrity of the lottery system and questioned whether Medenica would be able to hold SGI accountable to players if problems were ever uncovered in Maryland.

“I think we have enough here to say, in a climate in which ethics is now becoming a big deal in the minds of people -- how do we justify walking away from this as if it’s no big deal?,” Muse asked.

Since the Legislative Black Caucus letter was written, some members have broken with the caucus to support Medenica, Chasse said.

“Mr. Medenica's reputation for integrity, independence and objectivity is well known and highly respected in the industry,” wrote Lottery Communications Director Carol Gentry in written responses to WUSA9’s questions. Medenica declined to be interviewed by WUSA9, according to Gentry.

MBE Certification5 - DOT Response by wusa9 on Scribd

In written testimony to the Senate committee considering his nomination, Medenica said contractors working for the Lottery system “demonstrate an excellent track record and commitment to diversity. More than 61% of SGI’s Maryland staff are minorities, Medenica wrote.

Gentry provided a letter certifying that a subcontractor for SGI in Maryland meets the state’s Minority Business Enterprise requirements.

Medenica also wrote there are only three companies in the world qualified to bid on Maryland’s lottery contract, and that he plays no role in selecting the contract. SGI was the bidder that best met the state’s “technical factor” requirements, which is considered above price in the letting of the contract, Medenica wrote.

SGI Senior Vice President for Global Lottery Systems Patrick McHugh released the following statement Monday regarding its proposal to operate Maryland’s lottery:

“We are pleased that the Maryland Lottery and Gaming Control Agency reaffirmed its determination that Scientific Games’ proposal was the best for the people of Maryland. Scientific Games’ offering is expected to generate the highest returns for the Lottery and its retailers, including billions of dollars of revenue for the State. Scientific Games won this contract because we received the highest technical evaluation due to our innovative, industry-leading products and high quality services. Scientific Games appreciates the diligent work of the Maryland Lottery and we look forward to continuing to maximize sales, revenue and value for the State.”

Note: This story has been updated to correct misspellings of Gordon Medenica’s name. Mr. Medenica was reported to be a former executive of SGI in error. He was an executive of Northstar New Jersey which is partially-owned by SGI.

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