State’s lottery votes for payout

Failure to notify media a ‘mistake’

Arkansas’ lottery would pay about $54,000 toward resolving a lawsuit filed against the association that administers the Powerball game under a proposed settlement, Director Bishop Woosley said Thursday.

Woosley said the Arkansas Lottery Commission on Nov. 14 authorized him to vote on a proposed assessment to states in the Powerball game, and that the lottery’s failure to send out its usual e-mail notifying the news media about that meeting “was an inadvertent mistake.”

No reporters were present.

A notice of the meeting was posted on the state’s website Nov. 8 and on the lottery’s website Nov. 9 to comply with state law, he said.

Lottery spokesman Julie Baldridge said she regrets that she “wasn’t more thorough” and didn’t notify the news media about the commission’s Nov. 14 meeting.

“It wasn’t any attempt to keep it a secret,” she said.

The lawsuit, filed by Walker Digital and Walker Digital Lottery in 2010, claims that the Multi-State Lottery Association infringed on patents for applying lottery multipliers that allow lottery players - for a fee - to substantially increase a lottery game’s potential prizes.

But the association continues to deny the suit’s allegations against it, according to a draft of a patent-purchase agreement between Walker Digital, Walker Digital Lottery and Casino IP Holdings, which have offices in Stamford, Conn.

The association, based in Urbandale, Iowa, would agree to pay $12.85 million to Walker Digital Lottery and Casino IP Holdings under the draft agreement.

In the Arkansas Lottery Commission’s recording ofits Nov. 14 meeting, Woosley asked commissioners if he had the authority to cast a vote during the association’s Nov. 15 meeting to authorize a possible increase in the lottery’s budget based on an assessment from the association.

The association has “proposed to its membership, which is comprised of 33 states including us, that they would purchase these patents from this plaintiff for an amount and, in return for the purchase of the patents, the plaintiff would dismiss the lawsuit, covenant not to sue them again based on the patents, and that this matter would be resolved,” he said.

The association’s members have to vote on whether to settle the lawsuit and authorize the assessment of fees for each state that is a member of the association, Woosley said.

“So for the sake of transparency and making sure I have the authority, I wanted to put it before the commission, so no one was surprised that this vote took place and that I cast a vote either way,” he told the commission Nov. 14.

Each state’s assessment would be based on its sales for the Powerball game, so the larger states will pay quite a bit more than Arkansas’ lottery would, Woosley said.

The commission approved a motion by Commissioner Steve Faris of Central to give Woosley “the authority to do what he needs to do to remedy this matter.”

Woosley said he voted, along with many other states in the association, to authorize the assessments to the states during the association’sNov. 15 meeting.

As for the status of the proposed settlement, he said, “I believe the attorneys for the two sides are still communicating over the language.”

NOTICE OF MEETING

The amount of notice required for a meeting of a public entity to comply with the Freedom of Information Act depends on whether the meeting is a regular meeting, a special meeting or an emergency meeting based on a 2005 advisory opinion issued by then-Attorney General Mike Beebe.

With respect to a normal meeting, the law specifies only that the time and place of the meeting be furnished to anyone who requests such information, according to Beebe, who is now governor.

“With respect to special or emergency meetings, the FOIA requires that all mediaoutlets that have requested such notices be given at least two hours notice ‘to ensure that the public has a representative’ of some form in attendance at the meeting,” Beebe wrote.

“Furthermore, notice must be given in such a way that it is likely to reach the appropriate media organizations and does not amount to an attempt to circumvent the notice requirements of the FOIA,” according to Beebe.

As to whether the Lottery Commission met Nov. 14 in a regular, special or emergency session, Woosley said, the act doesn’t define a special meeting.

“We noticed it over [three] days out, which is what you do for a regular meeting,” he said, referring to providing notice of the meeting on the state’s and the commission’s websites.

Woosley said he doesn’t have any requests from any news media in 2011 or 2012 to be notified in advance about the commission’s meetings that he can find or recollect, and Baldridge told him that she doesn’t either.

He said the Lottery Commission makes it “a practice of sending that e-mail out for courtesy to the media and to be as transparent as possible.”

“The entire intent all along was to be open in our business dealings. The failure to send out the e-mail as usual was an inadvertent mistake,” Woosley said.

In May of 2011, the commission met twice without notifying the public as required by the state Freedom of Information Act, and thencommission Chairman Dianne Lamberth of Batesville later apologized for the lottery’s failure to provide public notice of a dinner meeting or a lunch meeting.

Northwest Arkansas, Pages 7 on 12/03/2012

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