Turner

PROVIDENCE — Starting in January, the head of the world’s largest lottery operator will no longer live in the country’s smallest state.

W. Bruce Turner, chief executive officer of Providence-based GTECH Holdings Corp. and its parent company, Lottomatica SpA, is resigning, one year after Lottomatica acquired GTECH in a $4.8-billion deal.

Turner announced his resignation yesterday in a conference call from Rome, where Lottomatica is headquartered. He will leave his position on Jan. 1, although his term on the Lottomatica board does not expire until next March.

“This was a difficult decision, but one that is timely and in the best interest of Lottomatica and myself,” Turner, 48, said. “The integration of the organization is complete. I have every expectation for Lottomatica’s continued success and market leadership.”

Turner, a former analyst for Raymond James Financial and Salomon Smith Barney, said he plans to start an investment fund.

“I have held a long interest in returning to the investment world,” Turner said. “I have determined that this is an appropriate time for me to leave Lottomatica and to pursue this adventure and a personal lifelong dream.”

Turner’s continued role at GTECH had been in doubt when the acquisition was announced 14 months ago. But in an unusual move, Lottomatica placed him in charge of the combined entity — to be run out of his office in GTECH’s new building in downtown Providence.

That decision recognized both Turner’s success at GTECH and the relative size of the companies. At the time, GTECH had more than five times as many employees as Lottomatica. Lottomatica ran the Italian lottery; GTECH had operations in more than 50 countries.

“It was clear, also to the CEO of Lottomatica, that we don’t have the leadership skills to run an international platform,” Lorenzo Pellicioli, the Lottomatica chairman, told The Providence Journal last year.

Lottomatica signed Turner to a five-year contract.

A year later, however, the leadership is shifting away from Providence. Yesterday, Pellicioli said he is replacing Turner as chief executive officer. He retains the chairman’s job.

“I am confident that I can be successful in this role,” Pellicioli, who lives in Paris, told analysts. “In the future, I will be leading this call.”

Turner’s planned departure was not a total surprise, and it does not signal a complete loss of local control.

In May, Turner stepped down as president of GTECH, saying he wanted to focus on investor relations and acquisitions. Jaymin B. Patel, then the chief financial officer of GTECH and Lottomatica, replaced Turner as president.

Turner remained GTECH’s CEO, a title that now passes to Patel, a 13-year employee based in Providence.

That appointment cements the central role of the Rhode Island-based leadership team, Turner said in an interview yesterday. GTECH is by far Lottomatica’s largest division.

In the conference call, Turner attributed his decision to leave to a new career opportunity. But it also comes amid shrinking revenue at Lottomatica and a cost-cutting effort that so far has involved the firing of 125 employees late last month.

Lottomatica brought in $567 million in the third quarter of the year, down from $578 million in the previous quarter and $590 million in January, February and March.

Net income has also shriveled, to $6.3 million in the third quarter, down from $33 million in the second quarter and $61 million to start the year. (Lottomatica lists its earnings in euros, and these conversions are not adjusted for the dollar’s recent loss in value.)

GTECH’s contributions have dropped from $304 million in the first quarter to $287 million in the third quarter.

“While we are pleased with progress on many fronts, we have acknowledged that there are some disappointments,” Turner said. Same-store lottery sales growth, he said, have grown by only 5 percent this year, leaving “substantial room for improvement.”

Executives are not only looking to grow sales to improve profits and a slumping stock price. (Lottomatica shares trade on the Milan Stock Exchange.)

Turner called the 125 layoffs, including 47 in Rhode Island, an “important undertaking,” part of a broader effort to slash personnel and other operating costs. That process is expected to result in the closure of various call and data centers across the U.S. next year.

Rhode Island may be spared further consolidations, GTECH spokesman Robert Vincent said, in part because the company has committed to maintaining 1,000 employees in the state in an agreement that extended the state’s lottery contract for two decades. (GTECH has 1,040 employees here.)

“The state cut a pretty good deal with us,” Turner said yesterday. “We’re very respectful of that contract.”

For the first time since 2002, however, Turner will not be making those decisions.

GTECH appointed Turner to its board in 1999, and he became interim CEO the next year. By 2002, his position had been made permanent, and he initiated a remarkable turnaround for the firm that culminated with its sale to Lottomatica.

From 2001 to 2005, revenue grew 34 percent. Turner accomplished this through aggressive cost-cutting. But as the company’s finances improved, he also spent liberally on acquisitions, pushing GTECH into the casino market through the operation of video-slot machines.

He was rewarded handsomely last year, when Lottomatica paid $35 a share for GTECH stock. At the time, Turner’s shares were worth $108 million.

In an interview yesterday, Turner said it was “premature” to disclose details of his planned investment fund.

But he has already made a large investment in Rhode Island real estate that he says will keep him anchored in the state: an 8,600-square-foot home in Jamestown that was recently completed after three years.

The house, on 7½ acres on the island’s north end, is valued at $5.3 million, according to town records.

“I don’t think I’m moving anywhere,” Turner said. “It is our expectation that we remain a part of the Rhode Island fabric.”

bgedan@projo.com