Meanwhile, back at the lottery commission | Arkansas Blog

Wednesday, July 29, 2009

Meanwhile, back at the lottery commission

Posted By on Wed, Jul 29, 2009 at 3:05 PM


Lottery Director Ernie Passailaigue mentioned to me last week that he hoped to push up the lottery start date from the scheduled beginning at the end of October. Get the scholarship dollars rolling, see? (Also change the subject from payroll dollars).

Anyway, he said at the commission meeting today that the lottery might be able to begin the "draw" games as early as Sept. 28. Powerball could start early as well. (In the video supplied by Jason Tolbert, Ernie P. says such an early start would be dang near historic in lottery annals.)

Will there be an old-fashioned drawing from a bin full of bouncing balls for the state "draw" games? Or will a computer generate random numbers? UPDATE: No live drawing. Computer-generated numbers. Intralot, the company that will handle the drawings, says it can get started a month early using its data center in South Carolina until the Arkansas data center is in place.

A live drawing would have cost $800,000 a year to produce, it was said. But what if somebody had packaged and sold the show to advertisers? You'd think there'd be pretty good viewer numbers on the lottery drawing. Or how about staging it in an entertainment venue, with a live webcast on, say, the Arkansas Blog? Thinking outside the box here.

The lottery also has decided to forego sponsorship of community events to save $650,000. Makes sense. Voters approved  a lottery for college scholarships, not as a secondary source of money for the VFW, garden clubs, collge athletic programs or whatever.

Also,  there are three bidders for the scratch-off ticket contract - GTech, Scientific Games and Pollard Banknote. Only Intralot bid on the "on-line" or computer and "draw" lottery portion of the business. They offered their services for 2.45 percent of net sales (just for reference, Kansas pays 5.12 percent of net online sales, Louisiana pays 4.34).  The other lottery biggies apparently weren't disgusted enough to drop out of this one. 

One other important matter considered by the commission today was whether or not to send out RFP's that would outsource the proposed local claims centers to banks.  Read more from Gerard Matthews on the jump.

Passailaigue said that if you look at the local claims centers in South Carolina, there's not a lot going on.  The centers require office space and staffing and, more often than not, only handle a couple of claims per day.  He and the staff discussed how to eliminate the costs and came up with housing the claims centers in local banks.  The RFPs approved by the commission will call for banks in the first, third and fourth congressional districts to handle claims between $500 and $200,000.  Banks would get a commission on the prizes they pay out. 

Commissioner Lamberth worried that banks would be reluctant to participate because of increased security needs and because some might be hesitant to get locked into a contract with a possibly controversial organization.  Other commissioners agreed but also said that putting the RFPs out and seeing who bites might not be a bad idea.  They decided to change the commitment from five years to three.  The original RFP also required banks to have anwhere from three to five locations.  That language was amended to "one to five" in order to let the banks determine how to best serve their customers.  Commissioners also asked Passailaigue to continue to search for claims offices and staff in the event that there was little to no response to the RFPs.  

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