$2 million credit topic at lottery meeting | Arkansas Blog

Monday, March 19, 2012

$2 million credit topic at lottery meeting

Posted By on Mon, Mar 19, 2012 at 4:15 PM

Arkansas Lottery Director Bishop Woosley released at today's meeting of the Lottery Commission board an e-mail from Scientific Games, which the lottery contracts with the Arkansas lottery to provide scratch-off tickets, in which the company offers the lottery at $2 million credit as an incentive for the state to keep contracting with Scientific Games and "not in the performance of any obligation or as an admission of any kind of liability."

Woosley said the $2 million credit would be explained by a 2010 audit of Scientific Games contract, executed under former lottery director Ernie Passailaigue. The lottery is sending the times the audit.

Phil Bauer, vice president of Scientific Games, who wrote the e-mail, referred to a "frank discussion" about the contract with Woosley and others "regarding the circumstances concerning the former Lottery administration's failure to obtain the LOC's [Lottery Oversight Committee] of the Recital of Selected Options, among other things. Although this situation was noted and reviewed a number of times in both internal and Legislative audits and cleared, we wish to finally resolve any ambiguities. ... We wish to work with you and your staff to remedy the situation and put this issue behind us for good.

In 2010, the state Legislative Audit committee found that SG was paid $3.9 million more than the Lottery Oversight Committee had been informed of, because of the lottery office decision not to run every contract by the committee.

In other business, the Commission learned about an Intralot software error in which 11 Powerball tickets for a new game were released prematurely in January. The lottery staff had to track down the tickets and issue new tickets to the players. The lottery office is asking Intralot for $5,061 to repay the office for software additions and the cost of the new tickets, and another $475 in out of pocket expenses.

Lottery revenues, while lower than the same period last year and $2.4 million behind the bud, are showing a trend upward, with February showing record sales of $49 million, up $5 million over last year, and the transfer of $9 million for the month to the state Department for Higher Education the fifth largest. Budgeted revenues for the year, however, are off $2.4 million. Since the lottery began in September 2009, the lottery has generated $222 million in scholarships and $713 million in prizes.

Julie Baldridge, the director of public affairs, said the lottery will have a "real budget" — real as compared to those in Passailaigue's era — in April for the 2013 fiscal year. She said Passailaigue's yearly figures were basically an estimate "divided by 12."

In his director's report, Woosley said that a strictly Arkansas Powerball Powerball-like draw game, with winners drawn six nights a week and an average jackpot of $158,000, will start in August or September.

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