Hickey: Delay screen games

Give Legislature to weigh in, senator urges lottery chief

Tuesday, May 13, 2014

State Sen. Jimmy Hickey, R-Texarkana, wants the Arkansas Lottery Commission to reconsider its decision last month to pursue the implementation of electronic-monitor games.

Lottery officials should forgo these games, or at least delay them until the 2015 General Assembly has weighed in, Hickey told lottery Director Bishop Woosley in an email Thursday.

On April 16, the commission authorized its staff to proceed with the games -- a day after a majority of the Legislature's lottery oversight committee supported a motion by Hickey to oppose such a move.

The lottery, which started selling tickets on Sept. 28, 2009, has helped finance more than 30,000 Arkansas Academic Challenge scholarships each year during the past four years. But ticket sales have declined in both fiscal 2013 and 2014, and officials are looking for ways to revive interest.

Besides having urged Woosley and the lottery commission to reconsider, "I have also advised you that my intention is to present new and/or revised legislation in the 2015 session as it relates to all aspects of the lottery," Hickey's email said, and he's already started "initial procedures to fulfill this intent."

"I believe, at a minimum, that the decision to introduce these 'games' should be deferred until the will of the Legislature can be determined at that time," Hickey said in his email. Woosley subsequently sent a copy of the email to the nine-member commission.

Woosley has said lottery officials are proposing starting a quick-draw monitor game Sept. 29 that's modeled after a New York lottery game. Lottery players would purchase monitor game tickets through a clerk as they do for draw games like Powerball and Mega Millions. The draws would be held about every four or five minutes and would be shown on a 40-inch television screen, or monitor, in places such as bars and restaurants.

Hickey said in an interview that he's worried that if the lottery purchased monitors and then "we do away with [the law allowing the games], that would be a huge expense that would come out of the scholarships that otherwise would not have had to come out."

He said he wants to make sure that if a lottery vendor "makes this huge investment and then we stop it, I don't want to be anti-business to them. I want everybody to know what the possibilities are."

Hickey said he wants to change state law in 2015 to bar the lottery from offering monitor games.

As for what other changes that he wants in the state's lottery law, "at this point I believe everything is on the table," Hickey said. "There is not any threats being made at this time."

State Rep. Jeremy Gillam, R-Judsonia, who is in line to be House speaker in 2015 and 2016, said the lottery commission was created to be "an independent group" under state's lottery law and that, "I don't know that the voters intended on us running the lottery."

In 2008, voters approved a constitutional Amendment 87 authorizing the Legislature to create a state lottery for college scholarships. The Legislature enacted the state's lottery law in 2009.

Gillam said "some polls" might be needed to figure out "where the pulse of the state [is] instead of making assumptions."

Opponents of the monitor games have argued that they're not sure that voters intended to allow for these games when they approved Amendment 87.

"I think a lot of folks are making assumptions on both sides of the issue on whether or not the voters are OK with [the electronic monitor games]," Gillam said.

Woosley said he's had discussions with Athens, Greece-based lottery vendor Intralot about providing monitors for free, and he is "hopeful they will agree."

Intralot has offered to provide the monitors and reduce its rates as part of a contract extension with the lottery.

Woosley said the number of television screens or monitors that the lottery is planning to deploy "will depend on how many retailers are interested in selling the game."

He estimated the lottery's ticket sales would be $417.5 million in the fiscal year that ends June 30 and $416.2 million in fiscal 2015 without the monitor games, while the projected ticket sales in fiscal 2015 would be $428.7 million with the monitor games.

The $12.5 million in projected ticket sales from monitor games in fiscal 2015 would raise nearly an estimated $3.5 million for college scholarships, Woosley said.

"All of these numbers are contingent on there being no delays, that we have enough retailers to sell, that the sales occur for the full fiscal year from September to June, etc.," Woosley said.

During the first 10 months of fiscal 2014, as of April 30, the lottery's revenues have dipped by $18 million over the same period in fiscal 2013 to $348 million, according to the lottery's records.

Also during the first 10 months of fiscal 2014, the lottery's net proceeds for college scholarships have slipped by $8 million over the same period in fiscal 2013 to $67.5 million, records show.

In February, Woosley cut his projection for net proceeds for college scholarships from $89.5 million to $82.7 million for fiscal 2014.

The lottery commission's next meeting is May 21.

Lottery Commissioner Raymond Frazier of Little Rock said he's not changed his mind since he voted last month to proceed with the monitor games.

"We need new players and new money. The newness of the lottery has worn off," he said.

Without trying other ways to stem declining lottery ticket sales, "we can't go back to the Legislature," Frazier said.

Lottery Commissioner Alex Streett of Russellville said he would vote again to proceed with the monitor games "unless I hear something different."

Lottery Commissioner Julie Baldridge of Little Rock declined to comment about Hickey's email. Lottery Commissioner Doug Pierce of Jonesboro said he hasn't given Hickey's request much thought because he won't be able to attend the commission's May 21 meeting.

The commission's other five members could not be reached for comment by telephone.

Metro on 05/13/2014