Murphy Oil 1st lottery retailer

LITTLE ROCK — With the state's lottery to begin in about one month, a Murphy USA gas station in Magnolia on Wednesday became the first lottery retailer to be licensed by the Arkansas Lottery Commission.

Fifty-six other Murphy USA stores throughout Arkansas also were licensed, said Ernie Passailaigue, executive director of the commission.

He said he expects 1,500 or more retailers to be licensed for the start of ticket sales Sept. 28.

"This is the perfect fit for us," Passailaigue told the commission. "It's all about scholarships, and that's what we are all about."

The lottery's net proceeds - what's left after expenses and prizes are paid - will go for scholarships for Arkansans at higher education institutions in the state. The estimates forthose proceeds have ranged from about $55 million to as much as $120 million a year.

Two years ago, Murphy Oil Corp. pledged $50 million over a 20-year period to help El Dorado High School graduates pay for college. Murphy USA is a subsidiary of Murphy Oil. The company has 57 stores in Arkansas, said Hank Heithaus, president of Murphy USA Marketing Co., which operates retail gas stations under the Murphy USA brand.

"The scholarship effort at El Dorado is transforming lives," said the commission chairman, Ray Thornton of Little Rock.

"We do expect that with your help we are going to reach the kind of effort that you made in El Dorado to provide scholarships for Arkansas students," he told Murphy USA officials.

Thornton noted a newspaper article Wednesday about a South Carolina retiree winning a $259.9 million Powerball jackpot after purchasing his winning ticket at a Murphy USA gas station.

Passailaigue said he expects Powerball ticket sales to begin Oct. 31 in Arkansas.

After the meeting, Heithaus said Murphy USA wants to be a lottery retailer because "it's something that the customers want and they look for.

"It helps make your store a little bit of a destination, and a lottery is a good thing for the state, and we want to support that," he told reporters.

"A guy comes in for a Coke and a snack and he picks up a lottery ticket as well. It's just another additional sale," Heithaus said.

Passailaigue said that so far lottery officials have received 1,200 lottery retailer applications.

Kevin McCarthy, the lottery's coordinator of sales training and retailer relations, said the applications are about evenly distributed among the four congressional districts, which vary considerably in area.

Steve Beck, general manager for lottery vendor Intralot, said the installation of lottery terminals would begin next week for retailers. He said retailers should get licensed by about Sept. 10 to ensure the installation of terminals to sell tickets on Sept. 28.

Passailaigue said the initial batch of scratch-off tickets will be shipped to retailers Sept. 24 and 25.

He said the lottery plans to sell scratch-offs - one $1, two $2 and one $5 - starting Sept. 28 and offer three to four new scratch-off tickets each month.He said the lottery plans to begin selling a $10 scratch-off "around the holiday season."

Most of the prizes for scratch-off tickets will be lower-tier prizes of $19 and under or medium-tier prizes of $20 to $500, Passailaigue said. Each retailer will have a scratch-off checker for buyers to determine whether they won a prize and guard against "lottery scams," he said.

He said the first game to be settled through a drawing probably will be the "pick 3" game. An Arkansas "lotto game" will start sometime next year, he said.

In another development, Thornton said the commission will have a private session Wednesday to interview seven applicants for the commission's internal auditor job.

Commissioner Mike Malone of Fayetteville said the audit committee recommended that the commission interview the seven, all of whom have agreed to be interviewed, according to Ernestine Middleton, vice president of administration for the lottery.

They include Adam Motherwell, assistant dean for finance and administration for the Fulbright College of Arts and Sciences at the University of Arkansas at Fayetteville; Ricky Lee Quattlebaum, internal audit administrator for the Arkansas Department of Finance and Administration; and Michael Hyde, chief auditor of the Arkansas Highway and Transportation Department.

The others are Patrick Patton, vice president for internal audit and information systems for the Arkansas Development Finance Authority; Alan K. Minor, owner of a certified accounting firm in Pine Bluff; Monica Reap, internal controls business adviser for Acxiom Corp. in Conway; and Terry Todd, former audit director for Century Bank and Wells Fargo of Texarkana, Texas.

The commission is allowed by law, Act 1405 of 2009, to pay the internal auditor up to $141,603 a year, but could pay up to $354,007 with the approval of the Arkansas Lottery Commission Legislative Oversight Committee.

In June, the committee signed off on the commission's plan to pay Passailaigue $324,000 a year, the third-highest compensation package, including salary and bonuses, among the nation's 44 lottery directors. Nine of the lottery's employees make six-figure salaries and that drew criticism from Gov. Mike Beebe and some lawmakers last month.

Thornton said he doesn't expect the commission to hire an internal auditor at a salary level that would require the legislative committee's approval.

He said he's not sure exactly when the commission will hire an internal auditor.

"It's a big step, but we need to hire somebody right away," Thornton said. "My guess is it is 50-50 whether we hire somebody [on Wednesday] or have a further meeting to consider it."

Passailaigue, former executive director of the South Carolina lottery, has said Arkansas' lottery is on the verge of setting the world record for the fastest startup ever.

The North Carolina lottery set that record when it started selling lottery tickets in 2006 115 days after its executive director started work there, according to a lottery spokesman.

Passailaigue has said he expects Arkansas' lottery to begin selling tickets about 92 days after he started work on June 29.

Last November, Arkansas voters approved Amendment 87 to authorize the General Assembly to create lotteries to pay for college scholarships. Earlier this year, Beebe and the Legislature enacted lottery implementation legislation through Acts 606 and 1405.