Now that the Legislature has passed a bill imposing a temporary ban on the Arkansas lottery offering electronic monitor games, some lawmakers say they want to explore whether to restructure the lottery and make it part of a state agency that works for the governor.
And Republican gubernatorial candidate Asa Hutchinson said he favors making the lottery a state agency accountable to the governor's office, while Democratic candidate Mike Ross said he's "open to common-sense ideas" from the Legislature about improving the commission and the lottery.
Both gubernatorial candidates said they oppose allowing the lottery to offer electronic monitor games.
Sen. Jimmy Hickey, R-Texarkana, who sponsored the legislation to bar the lottery from offering electronic monitor games until March 13, said he plans to introduce legislation during the 2015 regular session to permanently ban them.
Gov. Mike Beebe, a Democrat, signed the temporary ban, now known as Act 8, on Thursday. The governor has been opposed to monitor games since June of 2009.
Hickey said he also intends to review the entire lottery law with an eye out for other changes when lawmakers convene in January, and he's not ruling out making the lottery part of the Finance and Administration Department.
"If there are some other states that are operating without a commission someway and somehow, and we can see that would be effective and efficient for Arkansas, I think we would look at legislation to move forward with that to let the [Legislature] decide," he said.
Senate President Pro Tempore Michael Lamoureux, R-Russellville, said he's concerned about the lottery's operations.
It's "almost like nobody has control over [the lottery,]" he said in an interview.
"I know the [lottery] commissioners are frustrated with the Legislature," said Lamoureux, who has appointed commissioners Mark Scott of Conway and Julie Baldridge of Little Rock.
With ticket sales and net proceeds for college scholarships declining during the past two fiscal years, lottery officials had hoped electronic monitor games would help ticket sales rebound.
Supporters of the electronic monitor game called quick-draw said it's similar to Powerball and Mega Millions, except drawings would be held every four minutes and results would be shown on monitors similar to television screens set up in participating locations.
In April, the lottery commission authorized lottery Director Bishop Woosley to implement the games only a day after a majority of the Legislature's lottery oversight committee voted to declare its opposition to the games.
Lottery officials hoped to launch the game on Sept. 29, the day after the fifth anniversary of the start of the lottery's ticket sales. But they lost their showdown with lawmakers, at least temporarily.
The lottery's fiscal 2015 budget projects ticket sales of $428 million with $81.2 million collected for college scholarships. The figures include about $12.5 million in ticket sales revenue and about $3.5 million in college scholarships generated by the quick-draw game
"I think it would have benefited if it was under the governor more like a regular agency or maybe [had] more supervision from the governor," Lamoureux said. "I would rather have [the governor] overseeing it," he said.
Under the lottery law enacted in 2009, the Senate president pro tempore, House speaker and governor each appoint three commissioners to hire the lottery's director to manage the lottery's operations.
That law also created a 12-member legislative committee to oversee and review the lottery's operations.
The aim was to set up the lottery to run like a business and prevent lawmakers from micromanaging the lottery, the sponsors of the lottery law -- then-Sen. Terry Smith, D-Hot Springs, and then-Rep. Robbie Wills, D-Conway -- said in February 2009.
"We need to set up this lottery commission so it can run like a private business and can change at the drop of a hat what they do so they can change with market conditions," Smith told his fellow lawmakers.
Five and a half years ago, attorneys for the state Department of Finance and Administration drafted a 39-page lottery bill that would have allowed the governor to select a director to operate and to administer the lottery.
The draft bill also would have allowed the governor to appoint a five-member commission to establish and oversee the lottery's operation. The commission would have been in the state's finance department for "administrative purposes" but otherwise it would have been an independent, self-supporting and revenue-raising agency.
Beebe said it "suited me" not to have the lottery under his control.
"You'll have to ask the next governor," he said when asked if it should be under the governor's control.
"But I have taken a great deal of solace in the fact that I've got plenty to do, and the way they set up the lottery commission [as] kind of independent didn't bother me," the governor said Thursday.
"And then they have a legislative oversight committee that really provides whatever oversight over and above the commission ... or at least tries to advise them," Beebe said.
Former Lt. Gov. Bill Halter of North Little Rock -- who briefly challenged Beebe for the Democratic nomination for governor in 2006 before switching races -- led the successful campaign to start a lottery, persuading voters to pass a 2008 constitutional amendment authorizing it.
Beebe said "it depends on who you ask" about whether it would be better to have the lottery operate under the governor.
"If it had been under the governor, they'd never have hired Ernie Passailaigue, and I'd have fired his tail within days," he said.
In June of 2009, the lottery commission hired Passailaigue from South Carolina, where he directed that state's lottery, to develop Arkansas' at a starting salary of $324,000 a year. At the time, he was one of the top-paid lottery directors in the nation.
Before resigning in September 2011, he guided the development of the lottery, which raised about $190 million for college scholarships, but he also drew criticism for failing to abide by state travel regulations, for late lottery deposit of taxes on prizes and for other things.
The lottery raised $82.5 million for college scholarships in fiscal 2010, $94.2 million in fiscal 2011, $97.5 million in fiscal 2012, and $90.3 million in fiscal 2013. Woosley estimated it raised $80.5 million for scholarships in fiscal 2014.
Hutchinson said the state lottery "has become an important funding source for student scholarships, but we have seen problems arise from the beginning.
"These problems can be more effectively handled by making the Arkansas Scholarship Lottery program a state agency that is accountable to the governor's office along with continued oversight by the Legislature," said Hutchinson, a former 3rd District congressman and federal homeland security undersecretary.
He said he "would need to work with the Legislature and the commission to determine the right balance" as to "the exact structure," saying there are various options.
Hutchinson noted that the director of the Arkansas State Police reports directly to the governor, and the state police commission also has some authority. The state police commission is appointed by the governor and considers promotions recommended by the director, hears appeals of terminations and suspensions, and reviews trooper applicants placed on the hiring-eligibility list by the director.
There is merit to having geographic representation on the lottery commission, he said.
Through his spokesman Brad Howard, Ross said the lottery commission "was originally structured to ensure the House and Senate, not just the governor, have a role in its governance."
Ross "supports the Legislature continuing to have a role in the commission's governance and is open to common-sense ideas from the Legislature about how to improve the commission and the lottery program as a whole," Howard said.
Ross, a former 4th District congressman and state senator, "voted against the creation of the lottery [in 2008] and would not support expanding it to include electronic monitor games at this time," said Howard.
He said Ross doesn't believe these type of electronic games were the intent of voters when they approved the lottery.
Hutchinson said he doesn't believe that "electronic games were ever intended to be a part of the lottery program in Arkansas, and I do not support a change from its original purpose."
Supporters of the games have said the Legislature explicitly authorized the games in the 2009 lottery law, while opponents maintain that voters never envisioned the lottery would be offering these games.
The proponents of these games include lobbyists for Athens, Greece-based lottery vendor Intralot, while their foes include lobbyists for Oaklawn Park in Hot Springs. Oaklawn already offers Oaklawn Anywhere -- an online betting site for the horse-racing track authorized by the 2013 Legislature, including many of the legislative opponents of the lottery's electronic monitor games.
Rep. Jeremy Gillam, R-Judsonia, who is in line to be House speaker in 2015 and 2016, said making the lottery part of the state's finance department "is an interesting concept, but nobody has mentioned it to me."
A section on 07/06/2014