Senator says hire a lottery adviser

Proposal follows fall in ticket sales

State Sen. Jimmy Hickey, R-Texarkana, wants the Legislative Council to hire a consultant to review the Arkansas Scholarship Lottery's operations and make recommendations to improve a lottery that's experienced dips in ticket sales and funds for scholarships during the past two fiscal years.

He has proposed hiring Philadelphia-based Camelot Global Services Inc. for a consulting fee of $149,500, plus reimbursement for travel expenses up to $20,000. The proposed contract would begin Sept. 19 and end Dec. 31.

London-based Camelot Group PLC, which includes Camelot Global Services, has hired Capitol Advisors Group lobbyists Bill Vickery and Mitchell Lowe to represent them in Arkansas.

Hickey, who won legislative approval in July for his measure to bar the lottery from offering electronic monitor games until mid-March, said he believes it's time for lawmakers to say "yes" to "something or a plan to go forward." The lottery had planned to begin offering a quick-draw monitor game starting Sept. 29.

Hickey said the hope is to hire Camelot and not seek bids from other firms to conduct the lottery review because "we feel that Camelot is a very unique entity."

Camelot has successfully managed the national lottery for the United Kingdom since 1994 and specializes in "correcting lotteries that are underperforming," Hickey said. The company has worked with lotteries in states such as California, Kentucky, Massachusetts, New York and Texas, he said.

The proposed contract may be reviewed by the Legislative Council's Policy-Making Subcommittee before the council considers approving it Sept. 19, Bureau of Legislative Research Director Marty Garrity said in an email dated Thursday to the Legislature's Lottery Oversight Committee.

Lottery Oversight Committee co-chairman Sen. Robert Thompson, D-Paragould, said Friday that he hasn't reviewed the proposed contract yet. The committee plans to review it Sept. 18, he added.

Two months ago, the lottery commission authorized its staff to seek proposals from companies for consulting services and for the commission's own performance audit of its operations. Proposals from the companies were due Aug. 18.

Hickey explained that multiple lawmakers asked that "we look at all aspects of the efficiency of the lottery and the effective distribution of the Academic [Challenge] Scholarships provided by the lottery," after the passage of his bill temporarily barring the monitor games.

"A commitment was made to fulfill these requests, and this is the first segment of the process to facilitate a plan to present to the General Assembly in 2015," he said.

Lottery spokesman Patrick Ralston denied the Arkansas Democrat-Gazette's request for the names of the companies that submitted proposals to conduct the lottery's audit of its own operations. The lottery also declined to release copies of those proposals.

"Divulging the details of any proposal during the procurement process might be used by competitors or bidders to gain advantage, so I am denying this request in accordance with [Arkansas Code Annotated] 25-19-105(b)(9)(A)," Ralston said in an email last week.

Ralston said the nine-member lottery commission hasn't discussed whether to hire a consultant to review the lottery's operations, if the Legislative Council hires its own consultant. Commission chairman John C. "Smokey" Campbell of Hot Springs could not be reached for comment by telephone Friday.

Asked whether he wants the lottery commission to proceed with hiring its own consultant or scrap that idea, Hickey said the lottery is independent from the Legislature and can decide for itself.

"However, my wish would be that the commission would embrace this as a tool provided by the Legislature to help stabilize a very negative multiyear trend," Hickey said.

State Sen. Jonathan Dismang, R-Searcy, who is in line to be the Senate president pro tempore in 2015 and 2016, said he supports hiring Camelot Global Services as a consultant to review the lottery's operations.

"I hope we get a snapshot of where the lottery is and where it could be," Dismang said Friday.

"We need an outside look at the lottery, and [Camelot] has done a good job for other states," he said.

State Rep. Jeremy Gillam, R-Judsonia, who is in line to be House speaker in 2015 and 2016, said he wasn't aware that Hickey wanted to hire a consultant to review the lottery's operations.

"Nobody has run the idea past us in the House," he said Friday.

But Gillam added, "I don't know that it would be a bad idea to have someone else look at things."

Rep. Mark Perry, D-Jacksonville, who is co-chairman of the Legislature's Lottery Oversight Committee, could not be reached for comment by telephone Friday.

The Arkansas Scholarship Lottery's revenue dipped in fiscal 2014 by $29.5 million from fiscal 2013 to $410.6 million, and the amount raised for college scholarships slipped by $8.9 million to $81.4 million. It was the second consecutive year that the lottery's revenue and net proceeds for scholarships dropped.

The lottery has helped finance Arkansas Academic Challenge Scholarships for more than 30,000 students in each of the past four school years.

The Legislature has twice cut the amounts of the scholarships for future recipients partly because the lottery wasn't generating enough money for them.

Earlier this year, the lottery commission approved several of lottery Director Bishop Woosley's recommendations aimed at selling more tickets and raising more money for scholarships. Woosley has been the lottery's director since February 2012 and previously was the lottery's chief legal counsel.

The commission signed off on Woosley's recommendations to: implement the quick-draw monitor game, ask lawmakers to change state law to allow the purchase of lottery tickets with debit cards, increase the lottery's $4.5 million advertising budget by $500,000 in fiscal 2015 and lift the commission's ban on advertising on college campuses.

But the Legislature passed a law during a special session in July to bar the lottery from offering the monitor games until March 13 so the General Assembly can weigh in on them when it meets next year.

Consequently, the lottery commission revised and then approved a budget that reduces its projected funding for scholarships by $3 million to $78.2 million. It also trims its ticket revenue projection from $429.3 million to $416.8 million. Officials are projecting that fiscal 2015 scholarship proceeds will be the lowest of any fiscal year since the lottery started selling tickets on Sept. 28, 2009. The revised budget contains no references to electronic monitor games.

The amount raised for scholarships peaked in fiscal 2012 at $97.5 million. It dropped to $90.2 million in fiscal 2013 and to $81.4 million in fiscal 2014.

Metro on 08/31/2014

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