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Decision on lottery data halted 

Accountability at risk, new commissioners say.

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Arkansas lottery staffers seemed surprised late last week when two new lottery commissioners, Bruce Engstrom and Steve Faris, sat in on a meeting between the lottery's retail division and representatives from the state Department of Information Systems (DIS). The lottery held the meeting to request that DIS turn over historical data on retailer contracts to be housed on the lottery's own system, run by Intralot, a Greece-based company that holds the lottery's online gaming contact.

Engstrom and Faris were concerned that removing that data from a state-run system to one backed by Intralot would result in a lack of accountability. Faris suggested the lottery should not take action on the matter until it could be discussed before the full commission.

Engstrom said after the meeting that this was an important decision and lottery commissioners should have been notified. The commissioners also expressed their unhappiness that lottery director Ernie Passailaigue was not present.

The Arkansas Lottery Commission met on Monday. Following the meeting, Passailaigue said his staff would do whatever commissioners asked.

"What we have found out is that maybe every time we propose a work order with DIS, or any time we close one out, we run it by the commission," Passailiague said. "We're fine with that. It's part of the routine of doing business. If they want to be advised every time we approve a work order or close one, we'll do it. Like I said, they're our boss."

Neither Engstrom nor Faris addressed the matter of transferring data from DIS to the lottery's "back office system" during the commission meeting Monday afternoon.

During last week's meeting, both commissioners asked many questions in an attempt to find out why the data transfer was necessary. Lottery Vice President of Administration Ernestine Middleton said the lottery wanted to house the data to eliminate redundancies and make it more readily available for auditors.

"[Intralot has] all of our data," Middleton said. "They've been running our application process from the very beginning. When we asked DIS to do this, it was for the renewal process. Now we've got the renewal process where it needs to be. The only thing we need is for DIS to give us the historical data so when the auditors come in we can show them what happened with a particular retailer."

Rick Lee, the lottery's licensing manager, also said housing the data on the lottery's back office system would make it easier to provide information to auditors. However, Michael Hyde, the lottery's auditor, later said he had not requested such a move and was not even aware of the meeting between retail staff and DIS until shortly before it happened.

Faris, a former state legislator, said the issue was not about redundancy, but transparency.

"This is a major decision and as a commissioner, I don't know enough about this to say it's OK," Faris said. "I do know I just came out of the legislative arena and a lot of things that were happening over here were questioned in various ways by legislative audit and the oversight committee. It never hurts to put the brakes on something like this."

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