GTECH Holdings Corporation, a Rhode Island-based gaming services company building a new headquarters in downtown Providence, was bought earlier this month by Lottomatica, an Italian gaming company.
Announced Jan. 10, the sale will create a company with approximately 6,300 employees operating in over 50 countries. Though GTECH will become a wholly-owned subsidiary of Lottomatica, the sale has not affected plans to move GTECH's headquarters to Providence once its building is completed, said Robert Vincent, GTECH vice president for corporate communications.
There will be little change in the company's everyday operations, said Donald Stanford '72 GS'77, adjunct professor of computer science, a former GTECH employee and current advisor to the corporation.
"In the short term, there will be no change for job-holders in Rhode Island," Stanford said. "In this case, there's not a lot of duplication (in the operations of each company), so there won't be jobs that need to be cut out."
GTECH, which has a 20-year contract with Rhode Island to run the state lottery, decided to move its headquarters from West Greenwich, R.I. to Providence in 2004 in exchange for tax breaks from the city and state. Its headquarters are currently under construction across from the Providence Place Mall.
Vincent emphasized there would be few changes for GTECH employees in Rhode Island. "There is no mission or location overlap here. GTECH is a technology company and Lottomatica is an operating company. There will be no job cuts or anything."
He noted the most visible change in Providence would be increased traffic into the city because of the influx of personnel from abroad.
Governor Donald Carcieri '65 said he believes the sale would bring more business to Rhode Island.
"I was pleased to learn that GTECH will continue to play an important role in Rhode Island, and that no job losses are anticipated," said Carcieri in a Jan. 10 statement. "By making GTECH part of the largest lottery company in the world, I hope that this sale will provide opportunities for expansion and more jobs in Rhode Island."
Mayor David Cicilline '83 echoed the governor's sentiments.
"I have been assured that the new, global company is just as committed to Providence and Rhode Island. The downtown building is on schedule, and we look forward to an even brighter future for the company, its workers and its impact on our city's economy," Cicilline said in a Jan. 10 statement.
Vincent said GTECH's sale is not a sign of Rhode Island companies heading overseas.
"This is only an industry-related phenomenon, not a Rhode Island phenomenon," he said. "There's a lot of con-solidation going on in the lottery industry and in the gaming industry."
The merger is unique, Vincent added, because GTECH, the company being bought, will take over leadership of the company that is buying it.
"Lottomatica was looking not only to invest in a company but also to get a management team, so GTECH is going to take over the management," Vincent said.
The deal will not close until June. GTECH's investors, major clients and the federal Securities and Exchange Commission must first approve the merger.
"Every company is looking to do what's good for its investors," Stanford said. "When a buyer showed up who was willing to pay enough, and to make a good deal for GTECH sale owners, the company made their decision."
