The Office of the Chief Financial Officer today announced that it will put forward a proposal to award the contract to operate the D.C. Lottery to Intralot, an international gaming management company. The contract is for an initial five-year period, and must be approved by the D.C. Council.

The lottery contract has been an extremely sticky issue for the last year. Lottery Technology Enterprises, the company that’s been running the D.C. Lottery for over 20 years, was fined $1.4 million for major security breaches in 2008, after which Mayor Fenty put forward a recommendation to hand the contract over to W2I, a joint venture between Intralot and the family of local businessman and Fenty friend Warren Williams, Jr. But the Council, for what was seen as largely political reasons, moved to reject W2I, and the administration later retracted its proposal and reopened the contract to a new round of bidding. W2I then filed a protest against reopening the bidding process, leading the whole thing to get pushed back for several more months.

Today’s announcement represents a severing of W2I’s involvement as a partner with Intralot on this contract. OCFO says Intralot’s proposal was rated as the best of three submitted to a panel of independent reviewers.

But awarding the contract to an international conglomerate without the involvement of a local partner could prove just as controversial as the previous proposal. Generally, major city contracts of this sort have been required to be awarded to locally and/or minority-operated groups who team up with larger companies. But OCFO spokesperson David Umansky stressed that this new Intralot contract is written in such a way that they would still have to work with local companies.

“Any subcontractors they hire must, and I underline must, be from a District firm,” Umansky said.