DIA extends gambling monitoring systems, despite questions over vendor

Department will deploy Integrated Gambling Platform with Intralot, a company whose founder is the subject of international scrutiny

The Department of Internal Affairs is about to roll out a new gambling monitoring system from existing supplier Intralot, a company whose founder is the subject of international scrutiny.

The Integrated Gambling Platform (IGP) will complement the electronic monitoring system (EMS) introduced in 2007 to track and monitor gaming machine operations in pubs and clubs. The IGP uses compliance and enforcement intelligence information which the DIA gathers in cooperation with the NZ Police and other enforcement agencies such as Interpol.

The EMS contract was awarded to Greek vendor Intralot in 2005. Intralot has since been contracted to supply the IGP, which will expand DIA's compliance capabilities. IGP is a web-enabled, rules-based e-licensing system that will provide improved reporting and monitoring capability, DIA said when a heads of agreement for IGP was signed in 2010.

DIA says the first phase of the IGP will be implemented in May, and the project will be completed in 2014.

"The contract for EMS, signed in 2005, has been renewed as provided for in the original contract," DIA says in response to Computerworld enquiries. "The heads of agreement for IGP, signed in 2010 like the EMS contract, was agreed after a process that was conducted in accordance with government procurement

processes."

Intralot established a fully owned New Zealand subsidiary, Intralot New Zealand, a few months before it won the $35 million DIA contract. The company had a five-year maintenance agreement with DIA, that was due to expire in May 2012.

Lengthy agreement

But in October 2011, the maintenance agreement was renewed until May 2020, an unusually long period, according to IT government sources spoken to by Computerworld.

At the time the original contract was signed, Intralot said it would provide the base for New Zealand to become Intralot's Asia-Pacific hub, creating up to 100 jobs. It planned to subcontract hosting services at EDS' then Upper Hutt facility.

However, the deal fell through. EDS said at the time that it had been unable to reach agreement with Intralot. It didn't say why.

Industry sources have raised a number of issues about the IGP deal and the Greek company behind it.

Computerworld has been told the integrated gambling platform has been provided at zero cost, apparently in exchange for the greatly extended maintenance agreement.

Not so, says DIA. "The Integrated Gambling Platform is being developed at a cost deemed to be appropriate for a project of this kind and has not been provided free of charge. However, the cost is commercially sensitive information which we are unable to release."

Vendor's record

Intralot SA, the Greek parent company, has been the subject of many headlines around the world in the past several years, usually in association with its founder and chairman, Socrates Kokkalis. Kokkalis owns 25 percent of Intralot.

Kokkalis is also the founder and executive director of telecommunications and security systems company, Intracom Holdings, the parent company of Intralot.

It has been alleged that Kokkalis was a former Stasi (East German secret police) agent. In 1998, the German Bundestag (national government) devoted 26 pages to Kokkalis, his firms and associates in a 462-page report on Stasi involvement in commercial and other activities.

A 2010 study on the links between organised crime and corruption by the European Commission's Centre for Democratic Studies, devotes a section to him.

The study alleged that when Kokkalis' was a Stasi agent, he accumulated significant information about the general situation in Greece, its politicians, the Greek secret services, terrorism and Greek defence policy.

In 2010, Intralot lost out on a bid to privately manage the Illinois state lottery, partly because it would not have passed a background check, State Revenue Department officials said. A 23-page report says: "In light of the questionable background of certain key executives of Intralot and its parent corporation, numerous criminal indictments brought against them for alleged money laundering, fraud, embezzlement, bribery, misleading investors, and espionage, coupled with Intralot's loss of licences in Bulgaria and South Africa, and its dismal performance record in Australia, Intralot would be hard pressed to establish that it would have passed Illinois' probity standards for serving as private manager."

Despite the allegations and wide-ranging inquiries, Kokkalis has never, as far as we are aware, been convicted.

Computerworld asked if DIA had any concerns about Intralot's parent company and Socrates Kokkalis, given the widespread publicity concerning both?

DIA replied: "The department was aware of allegations surrounding the chairman of Intralot SA, Mr Kokkalis, from the outset and conducted extensive due diligence -- a process independently assessed by Audit New Zealand -- before contracting with Intralot NZ Ltd."

Kokkalis is not a director of Intralot NZ Ltd.

"We have worked successfully with Intralot NZ for more than eight years during which there have been no integrity issues," DIA says.

"We actively monitor all our contractors for a range of reasons.

"Intralot NZ Ltd provides technical services and is not involved in gambling operations in New Zealand. The systems have been developed to ensure the integrity of non-casino pokie gambling and the accurate accounting of money (EMS) and to manage the department's licensing and compliance activities (IGP)."

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18 Comments

Anonymous

1

Intralot says on its website, "Our dedicated teams both in NZ and Greece will work hard with the same commitment and methodology in cooperation with DIA, so as to provide a cutting-edge integrated gambling platform. When completed EMS will be unique of its kind globally." Seems DIA is the only gov't regulator to use this product from Intralot and NZ's gambling info is in Greece!

Anonymous

2

http://en.wikipedia.org/wiki/Sokratis_Kokkalis - German authorities' investigations in the Stasi archives found a 350-page report referring to agent "Rocco" ("953/63"). It was alleged that "Rocco" was the code name for Sokratis Kokkalis, allegedly recruited on 25 January 1963.[2] Kokkalis was alleged to have subsequently bribed Greek officials in order for the national telecommunications company of Greece to purchase East German telecommunications equipment.[2][3][4]
Kokkalis was investigated and gave evidence on allegations about his possible involvement in espionage, fraud and money laundering and two alleged misdemeanours of soliciting and giving bribes.[4] Eventually, there was no indictment, due to the statute of limitations having expired.
The Greek businessman was also involved in allegations about fraud in Russia, where his company, Intralot, had sold lottery equipment, technological know-how and software.[4] No formal charges were ever filed for any Intralot representative.[5]

daMystery1

3

WHY WHY WHY... would any Gov't get involved with a company such as:

[ US ]State Revenue Department officials said. A 23-page report says: "In light of the questionable background of certain key executives of Intralot and its parent corporation, numerous criminal indictments brought against them for alleged money laundering, fraud, embezzlement, bribery, misleading investors, and espionage, coupled with Intralot's loss of licences in Bulgaria and South Africa, and its dismal performance record in Australia....., not to add owned by an ex STASI.....SAY no more!! Is this Gov't trying to commit political suicide ??

Lemur

4

What you have to wonder what is in it for the likes of Intralot and its bosses. What is a thing like that doing with Internal Affairs in a country like NZ?

Lear

5

Charges have been laid against the owner of the Intracom telecommunications systems and technology group, Sokratis Kokkalis, and another four members of the company's subsidiary Intralot and state gaming operator OPAP over accusations that the five defrauded the state out of tens of millions of Euros in a 2007 deal involving gaming terminals.

source http://www.azonlinecasinos.com 31st May, 2011

WTF

6

Intralot fined with 7.9 m euros on Colombian court casehttp://www.marketall.eu/business/155-intralot-loses-abrtitration-case-in-columbia-fined-with-79-m-euros-

Aussies fine Intralot for bingo boob | Reviewed-Casinos.com
www.reviewed-casinos.com/news/1477270509.html

D.C. Lottery Contract Being Investigated By Federal Grand Jury
www.huffingtonpost.com

Confidential lotto board meeting tapes leaked - The Herald
A Gidani/Intralot manager was caught defrauding the lottery of R250,000 by duplicating winning tickets and stealing unclaimed winnings.www.peherald.com/news/article/5070Feb 28, 2012

Usker

7

Romania's National Anticorruption Directorate (DNA) prosecutors have started an extensive investigation into the procurement contracts signed by the National Lottery's managers, contracts that caused the company hundreds of millions of Euros in damages. "The contracts that Cristea (former head of the lottery) signed with Greece's INTRALOT are damaging for the Romanian state"

http://www.nineoclock.ro/extensive-dna-investigation-at-the-top-of-romanian-lottery/ - APRIL 21ST, 2013

Dedalus

8

You have to wonder who in DIA got backhanded by Intralot.

Anonymous

9

Beware of Greeks baring gifts.

Tui

10

Organised crime is not what NZ govt does on Wednesdays. YEA RIGHT!!!!!!!!!!!!

Anonymous

11


Looks like the Romanians have got a nearly identical problem -

"Nicolae Cristea, former head of the Lottery from the Revolution until 2006, will be summoned next, then Gheorghe Benea, head of the Lottery in 2009-2012. The two are asked to explain the clauses of the contract signed with Greece's INTRALOT, a contract that clearly put the Romanian state, the company's sole owner, at a disadvantage, a fact proven by all audit reports authored by the Court of Accounts inspectors. Cristea is responsible for the signing of the first contract with the Greeks, the contract for the 1993-2003 period, and for the second contract signed in 2003. The last INTRALOT contract is set to expire this year. Benea is accused of negotiating with the Greeks a 10-year extension of these contracts".

NINEOCLOCK |*APRIL 21ST, 2013 AT 9:00 PM

Caz

12

2002 - INTRACOM S.A., an affiliate of INTRALOT S.A., acquired 41% OF SIEMENS TELE INDUSTRIE S.A.

Kokkalis has close connections with Volker Jung. Until 2003 Jung was a member of the Executive Board of Siemens, and immediately after his retirement joined the Board of Directors of Intracom.

2010 - Kokalis was summoned before a parliamentary commission in connection with the Siemens's case regarding large orders of equipment that were granted to Siemens and Intracom. - http://www.grreporter.info/en/stockbrokers_and_businessmen_shifted_black_cash_siemens_politicians/2934#sthash.0lviFQdf.dpuf

2012 - Greece prepares legal action against 10 high-ranking current and former executives of Siemens, the German electronics and engineering giant accused of bribing Greek politicians to secure state contracts. www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_12/07/2012_451870

2012 - Siemens agrees to pay #1 billion towards settlement of corruption charges $800 million of which was a fine imposed by U.S. in addition to the billions of euro paid in fines, back taxes and late interest.

aljkd

13

'department of internal affairs'anagrams to 'I'm a sniffler and fat penetrator.'

Strewth

14

The world believes NZ is one of the least corrupt countries. So much for that!

Keith

15

DIA has committed an offense so preposterous that the police and SFO will feel too stupid to even write a report about it.

iphigne

16

Lottery commission probed for possible corruptions, shady contracts: sources
SEJONG, April 15 (Yonhap) -- South Korea's state-run audit agency has launched a probe into the government's lottery commission on suspicions of personal corruption and the shady acquisition of contracts.

The main focus of the probe could be placed on the commission's contract last December in selecting INTRALOT, a Greek firm, to run the country's online lottery system in cooperation with LG CNS, a South Korean system developer.

http://english.yonhapnews.co.kr/business/2013/04/15/16/0503000000AEN20130415003200320F.HTML

Anonymous

17

Intralot issues denial after Italian press reports
April 26, 2013 Casino News

Intralot Italia has released a statement regarding the arrest of two men over the weekend. The firm issued the words earlier today after newspaper reports that a current and former employee were linked to an investigation into match fixing.

http://bonusrepublic.com/tag/intralot/

2eachwayon5 meeting 3

18

Pretty sure that DIA would have carried out due diligence prior to the resign.

Come on enough of this tall poppy stuff I am off for souvlaki and chups.

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