The Arkansas Lottery Commission Legislative Oversight Committee delayed action on whether or not to favorably review the lottery commission's online gaming contract with Intralot. The committee will take up the issue again at their meeting on Thursday. Failure to favorably review the contract could put the projected Sept. 28 start date in jeopardy, although that was the main sticking point for most of the legislators on the committee. Of course, just a short while ago, legislators were complaining that things weren't moving along quickly enough. Lawmakers cited constituent concerns that the lottery is moving along too quickly, but today's meeting left the impression that committee members were being contrarian in order to get their names in the paper.
More details on the jump.
Arkansas Lottery Commission Chairman Ray Thornton began today's meeting by defending the contract with Intralot, comparing the 2.45 percent of net sales the lottery will have to pay the company with higher figures in other states including, Oklahoma, Texas, Missouri and Kansas.
Legislators expressed concerns that the commission only received one bid on the contract, which would provide online services and equipment for lottery retailers and develop the software and tools necessary to implement draw games like Pick 3 and Powerball. Lottery Commission Director Ernie Passailaigue said comparing the Arkansas contract with those in other states was a difficult comparison to make. Passailaigue says that lottery vendors essentially "hedge their bets" when dealing with start-up lotteries because the revenue figure is such an unknown.
"They have to bid cautiously," Passailaigue said, "basically on a worst case scenario." He also said the Arkansas contract included a number of things that others around the country did not including hot-line services for retailers, paperstock for tickets, thermal branding (a way to validate on-line tickets), neon signage in the stores and color monitors (should the commission ever decide to go with video terminals). "There's room for growth there," he said.
As noted above, legislators seemed most concerned with the Sept. 28 start date that Intralot agreed to in the contract. That date is a month ahead of the original Oct. 29th target. Passailaigue repeated his mantra that gettting the lottery up and running as soon as possible would create more scholarship dollars for students. He also said that while it would take a considerable amount of work, both his staff and vendors could be ready to launch by Sept. 28.
Commissioner Thornton said the commission would be willing to delay the start-date if he felt the lottery was not ready at that time.
"I do think it would be difficult to make the case that [the contract submitted by Intralot] is not compliant with our standards and I don't think we should delay it," Thornton said.
Passailaigue explained the benefit of going forward with the contract. "The political and legal risks are minimal and the possible reward is enormous," he said.
Committee members asked the lottery commission for more information regarding involvement of minority and female business owners and comparisons with other states (in terms of what services are provided and for what rates). The committee will take up the issue in their meeting on Thursday, which will be held at the Capitol building at 9:00 a.m.