Arkansas Lottery and Intralot strike a deal | Arkansas Blog

Saturday, November 22, 2014

Arkansas Lottery and Intralot strike a deal

Posted By on Sat, Nov 22, 2014 at 8:43 AM

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The Arkansas Lottery has struck a tentative deal on a three-year contract extension with Intralot, the Greek-based vendor that has been paid about $11 million annually.

Director Bishop Woosley has been negotiating with Intralot on a reduction in the lottery's current deal that pays Intralot 2.45 percent of sales. The lottery had proposed a reduction to 1.95 percent; Intralot countered with a "best" offer of 2.17 percent.  At a meeting Wednesday, some lottery commissioners pressed for either pushing Intralot harder or seeking competing bids. Others said there'd be complications in a change of vendors and said they might not get competing bids.

It was decided for Woosley to confer further with Intralot and report to the Lottery Commission Monday.

Friday evening, Woosley sent an e-mail to commission members (shared with me) that Intralot had accepted his proposal of 2.11 percent, which I figure would produce roughly another $240,000 of savings, plus provide a $100,000 "marketing fund." All told, the negotiations seem to have put $1.5 million more (presuming sales continue at the same levels) into the scholarship fund.

Here's the back-and-forth reflected in e-mails Friday between Woosley and Tom Little of Intralot:

Little:

Bishop, Thank you again for the recent (4:11pmEST) counter proposal. We appreciate the efforts and are trying to be reasonable in response. We believe that we can make it work at 2.1399% and the $100,000 one-time marketing fund. Shall I have the Amendment prepared?

Woosley:

Tom I have been authorized to counter your offer of 2.1399% + a $100,000 marketing fund with an offer of 2.11% of instant and online sales + a $100,000 one-time marketing fun. Look forward to your response.

Little:

Bishop, OK you have a deal at 2.11%. I want this to be a partnership and both of our organizations to work together going forward to make Arkansas the best Lottery in the US. Jay will work on the amendment.

The deal comes as the lottery is undergoing heightened legislative scrutiny in a consultant's contract with a British gambling company to review lottery operations.

Intralot's rate in Arkansas for providing on-line games was far more favorable than in other states, though defenders said its first seven-year contract also took into account big startup expenses. Nonetheless, as Lindsey Millar reported for us several years ago, in 2011, Louisiana paid Intralot $10.65 million on $236 million in sales while Arkansas paid $11.4 million on $73.9 million in sales.

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