Former lottery officials rap no-bid contract extension | Arkansas Blog

Monday, January 18, 2016

Former lottery officials rap no-bid contract extension

Posted By on Mon, Jan 18, 2016 at 12:35 PM

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Arkansas Business' Mark Friedman has a long look  at the Hutchinson administration's decision to extend a major lottery vendor's contract by 10 years, without taking competitive bids, though the vendor, Scientific Games, was found three years ago to have been paid millions more than its original contract called for. A renegotiation sent $2 million back to the state.

The Hutchinson administration says this is a good deal in the long run. Former Lottery Commissioner Bruce Engstrom and former internal lottery auditor Michael Hyde have questions.

The lottery says the new deal will save millions for the state in lower commissions on scratch-off ticket sales, though if sales explode sufficiently, Scientific Games can get a huge commission windfall.

Lottery expenses and contracts and salaries have been a source of debate since the lottery began. Not surprising for an enterprise in which billions run through the till.

But here's another important question: Will the new test score requirement to qualify for a lottery scholarship and the lower first-year payment wind up altering dramatically the number of poor and minority students who qualify? THAT is a question that needs some careful auditing in the months ahead.

NOTE: I should have said earlier that you can expect more skulduggery, not less, in the future. Since the Hutchinson administration abolished the publicly appointed Lottery Commission, it moved all discussions to backrooms and private legislator/lobbyist discussions. We'll only know what they want us to know and when they want us to know it — generally after the deals are done.

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