By Cliff Peale
The Cincinnati Enquirer

Roger W. Ach II

Roger Ach imagines the day when hundreds of thousands of people buy lottery tickets via personal computers, or pay to play games on his company's Web site.

He's so certain the idea will work that he's sunk more than $19 million of his and his friends' money into a venture that so far has eluded his high hopes.

But now, the man Cincinnatians know as a civic powerhouse and charitable contributor has reached a critical phase. A run of court battles and tax disputes - with Cincinnati, Hamilton County, even the five-star Maisonette restaurant - has brought financial strains to his front door.

His house - the one featured in the movie Rainman and appraised at $1.35 million - is headed toward the auction block this week in a Hamilton County court-ordered foreclosure. And in June, a warrant was issued for his arrest in Denton County, Texas. He faces a felony charge of bouncing a check for at least $100,000.

Against this backdrop, Ach continues to lobby states - including Ohio, where he is an old friend of Gov. Bob Taft - to certify his company as the first online retailer of lottery tickets. Ach has been chasing a slice of the $42 billion lottery market for five years, ever since his company landed the rights to the Internet site www.lottery.com.

"Its time has come," Ach said of the idea.

Ohio is less sure. State lottery officials and legislators await a signal that Taft would approve Internet lottery sales. So far, they've seen little movement.

"We're taking part in that discussion, but it's not something we anticipate happening soon," Taft spokesman Orest Holubec said.

In the meantime, Ach is working to diversify the business. Its name has been changed from Lottery.com to Games Inc. to underscore its run at Web-based games.

"Sure it's been tough to do," he said. "It's financially difficult for any entrepreneur to build a business from scratch. But that's why entrepreneurs do what they do."

Chad Wick, president of the educational think tank KnowledgeWorks Foundation, who first invested with Ach in the mid-1990s and now is a member of the Games Inc. board, thinks the company will survive.

Janet and Roger Ach at the Palace Restaurant downtown in 2001. (Enquirer file photo) | ZOOM |

"If anybody can do this," he said, "Roger can."

'Cost of doing business'

For the nine months that ended March 31, Ach's company lost $2.2 million. During the same nine months last year, it lost $3.1 million. Still, Ach says that neither he nor the company is in financial trouble. The company is current on its salary and operating costs, he said, and could start breaking even by mid-2004.

But business partners and employees, as well a handful of lawsuits filed in recent years, paint a different picture: an investor who has poured his money into one company, has tapped many of his friends to invest and is juggling money to pay the bills.

He won't comment on the indictment in Texas where, according to court records, he wrote a check in October 2002 to a consultant helping him make Lottery.com a publicly traded company. The consultant, Tim Halter of Halter Financial Group, declined to comment.

Nor did Ach want to talk about the pending foreclosure on his house. He said only that the "personal commercial dispute over the house has nothing to do with the health of the business." His lawyer said a settlement with Bank One, which holds a note for $1.3 million, is close at hand.

Finally, he didn't want to comment on two lawsuits involving former merger partners. Nor would he discuss a current dispute with the former owner of Lottery.com, which wants the name back.

"I don't think (the lawsuits) say anything about us," he said. "I think it's a cost of doing business. We tried two mergers, and at the end of the day, when we went to close the mergers, the companies were not as represented. So we had to pull away."

Ach claims his business is growing less dependent on the goal of selling lottery tickets over the Internet. If he can acquire games that Web users will pay to play, he says he can cash in on the years of investing in software and other overhead. He said he's working on acquisitions that will add $35 million in annual sales, compared to less than $1 million now.

"We've planned our entire business around games and Internet entertainment," he said. "Whatever we get, ever, from lottery tickets over the Web, is upside, is entirely icing on the cake."

Lawsuits and unpaid bills

While the business has taken a turn, Ach has left a series of lawsuits and unpaid bills that have earned him many critics who claim he makes promises he can't possibly keep.

Ach said that as he has grown older, has become more stubborn about paying only what he really owes.

Ach seems to live the high life, his critics say, tooling around town in a Corvette and dining at the city's finest restaurants.

But although he's settled most cases quietly, the lawsuits and financial disputes are hard to miss. Both Cincinnati and Hamilton County have taken him to court for failing to pay taxes. Ach negotiated settlements in both cases.

One of Ach's favorite spots, the five-star restaurant Maisonette, sued him in 2001 for failing to make good on a tab for $8,759. He settled that case, too.

Money troubles also spilled over into Games Inc. Casey Barach, the former vice president of business development who left the company in mid-2001, said there was difficulty meeting payroll starting in the spring of that year.

"Clearly, we were struggling," Barach said.

In court papers, there is plenty of evidence that Ach's company has struggled for more than a year to stay afloat. In a deposition given last November, in a case where a former employee sued Ach's company for $99,000 in unpaid bonuses, Ach acknowledged problems going back 18 months.

"It (the company) was never in a position to repay its creditors as well as meet its operating expenses, during that period," Ach said in a deposition filed in Hamilton County Municipal Court.

Other problems surfaced in a lawsuit resulting from the aborted 2000 merger between the Lottery Channel, another Ach-controlled company, and MDI Entertainment Inc. of Hartford, Conn.

MDI's CEO, Steve Saferin, wound up suing Ach in a federal court in Connecticut to force repayment of a $108,000 loan targeted for payroll.

Ach wouldn't comment, saying the Saferin suit had been settled.

"Our deal fell apart because I couldn't stand it anymore," Saferin said. "I just realized I couldn't work with the guy."

Some of Ach's investors say they can work with him. Many readily admit that they invested tens of thousands of dollars because they were friends. They've seen no returns, no dividends, no bonuses from big contracts. They get regular letters from Ach updating them on the company.

They have invested not so much in the Lottery Channel, or Lottery.com, or Games Inc. They've invested in Roger Ach.

"The reason I invested is because Roger's a friend," local accountant Martin Wade said. "My biggest dream in the world is that he hits a home run. For his sake, more than my sake."

Joe Ganim of Hyde Park, another friend of Ach's who invested more than $10,000 in Ach's company in the mid-1990s, said Ach is always upbeat to investors.

"All the news we've ever had is pretty much positive, other than the fact it's taken longer than anybody anticipated. ... I did it originally because I think he's a pretty bright guy. Even my wife made a comment that if she could buy lottery tickets over the Internet, she'd do it."

The idea

Ach and his investors are convinced that online lottery sales is such a good idea that it has to happen eventually.

"Look at Amazon.com or any of those organizations," Wick, the Games Inc. director, said. "It took a long time to produce a positive bottom line."

And since residents can register license plates or incorporate a business online, why shouldn't they be able to buy a lottery ticket that way?

"A simple look at the lifestyle of most people says they don't have extra time to go buy a lottery ticket," Ach said. "This is merely giving the same accessibility afforded to ... other state functions."

Ach has hired former Ohio Senate president Stan Aronoff as a lobbyist. "My gut feeling is it's an issue whose time is on the verge of coming, not only in Ohio, but across the country," Aronoff said.

David Gale, executive director of the North American Association of State and Provincial Lotteries, a trade group in Cleveland, called the issue "a gray area."

"I think the issue of Internet gambling is something that will be decided within each state's borders," he said. "It's just a matter of, is there somebody out there who's willing to test the waters?"

Skeptics worry about gambling addiction, underage gamblers and the financial hit store owners - and therefore the lottery - might face.

As a result, the Ohio Lottery seems an unlikely pioneer. "We would need a lot of things to happen," spokeswoman Mardele Cohen said. "Even if it was available, I don't know if that means it would be right for the Ohio Lottery."

A high-profile guy

Ach has long been a high-profile guy in Cincinnati. Starting with a run for the Cincinnati Board of Education in 1969 at age 26, he has commanded headlines and public status.

In 1988, movie stars Tom Cruise and Dustin Hoffman used his Tudor-style home on Beechcrest Lane in East Walnut Hills for scenes in their hit Rainman. In 1990, he stepped in to chair the Contemporary Arts Center after its director was indicted on obscenity charges.

For years, Ach and his wife, Janet, threw a Christmas party that has long been one of the Tristate's favored holiday invitations, and they are well known on Cincinnati's moneyed circuit.

They've also co-chaired the Hospice of Cincinnati's "Gourmet Sensation" events, raising $1.4 million over several years, Ach said. Now 60, he's a longtime member of the Cincinnati Park Board.

The Achs' charitable work draws raves from non-profit agencies around the Tristate. Vickie Brooks, executive director of AIDS Volunteers of Cincinnati, said the couple has willingly used their home to organize and host memorial services, and they have proven willing and formidable fund-raisers.

"What's unusual is that Roger and Janet expect nothing in return," she said.

The high-profile image grates on Ach's critics, particularly given his tax disputes.

"This guy is traipsing around town being billed as a socialite businessman, and he's not paying his taxes," Hamilton County Auditor Dusty Rhodes said. "It's almost like it's a double life." Rhodes acknowledged the Achs' taxes are no longer in arrears.

'How big is the business?'

Ach worked for more than a decade as a broker in New York, commuting back to Cincinnati for weekends. In the early 1980s, he returned to Cincinnati and started Chicago West Pullman Corp. with another local investor, John Weld Peck. Named after a railroad that was its first acquisition, the company grew to include a steel mill in Cleveland, a maker of air-handling equipment named Vortec Corp. and American Steel & Wire, which Ach and Peck took public.

Chicago West Pullman fell victim to the 1990-1991 recession, and within a few years, all of its operations were sold. Ach was left to look for new investments. He had heard about one idea, selling lottery tickets on television in each state.

"We said, 'How big is the business?' " Ach recalls.

But Ach's new Lottery Channel only got on the air in Rhode Island. It hasn't been active for years.

From there, he moved to try to convince states to sell lottery tickets on the Web.

Ach won't estimate the revenue his company could make. But if the Internet boosted state lottery sales by just 2 or 3 percent, hundreds of millions of dollars could be at stake.

Despite his current situation, Ach remains "enamored" of his idea, says former partner Peck.

From the start, "he was out knocking on doors," Peck said, "and has been virtually ever since."

E-mail cpeale@enquirer.com