Lottery Commission to meet again on vendor contract | Arkansas Blog

Tuesday, December 23, 2014

Lottery Commission to meet again on vendor contract

Posted By on Tue, Dec 23, 2014 at 3:17 PM

The Arkansas Lottery Commission will meet by telephone Monday, Dec. 29, to consider extension of the contract with Intralot to provide online lottery game services.

The lottery has been negotiating with Intralot for a reduction in the cost of its contract. It came up with a proposal that was to be considered Dec. 5. It called for continuing to charge 2.45% of revenues until July 1, when the rate would drop to 2.165% for the contract, with a three-year extension.The change was estimated to save the lottery more than $2 million over the life of the contract through 2019 for scholarships.

The Dec. 5 meeting was canceled, giving way to a discussion of the lottery at the legislative oversight committee. Legislators there heard criticism of the rate from a consultant it had hired, Camelot Global.

Intralot defended its pricing after controversy arose. A lottery spokesman said there's been no change in the proposal since Dec. 5. The meeting Dec. 29 will consider the same terms.

The Lottery Commission itself apparently has differing opinions on the Intralot proposal, with Commissioner Bruce Engstron notably pushing for a better deal.

A larger issue for the lottery is the designs by legislators led by Sen. Jimmy Hickey to seize control, including with a change of commission appointment to sole gubernatorial power, rather than also legislative leadership. The suspicion is that Camelot Global, now serving as a one-time consultant, could emerge as a major player in a reconstituted lottery.

The Arkansas lottery arrived late and has produced less than anticipated, though still more than $80 million a year for college scholarships. A bigger concern than new leadership is the desire by some legislators to stop giving first-year scholarships to students who don't attain relatively high ACT and GPA scores in high school. Given the tracking of academic performance with economic circumstances, such a change would hit poor students the hardest at a time when they need help most to pursue education rather than joining the workforce at a low-pay job. It would turn the lottery into an entitlement program for the economically advantaged, which some legislators would undoubtedly like.

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