UPDATE: Lottery negotiations with Intralot continue | Arkansas Blog

Tuesday, December 2, 2014

UPDATE: Lottery negotiations with Intralot continue

Posted By on Tue, Dec 2, 2014 at 7:07 AM

The Arkansas Lottery still hasn't concluded a deal with Intralot, the Greek vendor that has been paid about $11  million a year to provide on-line lottery ticket sales.

We reported earlier that a contract extension agreement that would reduce Intralot's share of ticket sales from 2.45 to 2.11 percent — and provide about $1 million more a year in profit to go to lottery scholarships — had fallen apart on effective dates. The lottery thought the idea was for the reduction to take effect immediately. Intralot understood it wouldn't take effect for nine months. Now, it develops, there's further differences on whether the rate would go back to the higher level after three years.

I asked Lottery Director Bishop Woosley where things stood. His summary:

There was an offer from them this weekend and a counter by the ALC today. Their offer was the we receive the 2.11% rate for 3 years beginning in January 2015, and go back to the old rate (2.45%) for the remainder of the contract after that (approximately 19 months .... We countered with 2.11% for the remainder of the contract, which was the deal we thought had been agreed upon last week. That is it for now. 

Both sides have some incentive to get a deal done, with an ongoing legislative lottery review that could produce a proposal to privatize the lottery through a British gambling company. Taxpayers particularly have an interest. Privatization would close the door on transparency of the operation.

Intralot believes it provides more to Arkansas in equipment and add-on features than it provides in states with lower rates. It also argues that the state might not find a vibrant competitive market if it spurns Intralot and seeks bids.

UPDATE: As for that last, Angela Wiiczek, vice president of corporate communications for GTECH, another major player in the lottery operations business said, "GTECH would absolutely be interested in taking a look at Arkansas."

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