Out of gate, lottery idea a bust for 12

Oversight-panel support nil for initiating monitor games

Sen. Stephanie Flowers, D-Pine Bluff, is shown in this Tuesday, March 19, 2013 file photo.
Sen. Stephanie Flowers, D-Pine Bluff, is shown in this Tuesday, March 19, 2013 file photo.

In an unprecedented move, the Legislature’s lottery oversight committee on Tuesday declared its opposition to the Arkansas Lottery Commission implementing electronic-monitor games, after several lawmakers questioned the merits of the games.

In a voice vote with a few lawmakers dissenting, the 12-member committee approved a motion by Sen. Jimmy Hickey, R-Texarkana, of “nonsupport” for implementing this type of game. Today, the commission is to consider whether to approve electronic-monitor games, a move aimed at bolstering lottery revenue and net proceeds for college scholarships after nearly two years of declining sales.

Sen. Robert Thompson,D-Paragould, said he allowed the committee to vote on Hickey’s motion as “a sense of the committee, just where the committee is on this issue.”

But Committee Co-Chairman Rep. Mark Perry, D-Jacksonville, who urged the Lottery Commission in June to consider electronic games, said Hickey’s motion “is something we haven’t really done before. It is kind of pre-emptive because the commission hasn’t actually acted on it. I don’t know what kind of weight it bears.”

Lottery Director Bishop Woosley told lawmakers that lottery players would purchase tickets for monitor games through a clerk as they do for draw games like Powerball and Mega Millions, and the draws would be shown about every four or five minutes on a 40-inch television screen. Fifteen state lotteries offer the “keno” and quick-draw monitor games, while one state lottery offers a card monitor game, and a bingo monitor game is scheduled to begin in New Mexico in June, he said.

“I think there has been a lot of misinformation about the fact that you could walk up to a screen and touch it and it would spit out a ticket,” he told the lottery oversight committee.

“As most of you know in Arkansas, we are prohibited from having any type of interactive monitor, any type of machine that will, based on you touching it, spit out a lottery ticket of any form or fashion.”

Woosley said the monitor games would appeal to new players, such “as someone who may be just sitting in a tavern and just want to sit there and play for 30 minutes.”

The lottery currently has nearly 1,900 retailers, but officials expect the new game would cause that figure to grow.

“It’s new money,” Woosley said, adding that the electronic games also might be available in restaurants and airports.

During the first nine months of this fiscal year, the lottery’s ticket sales dropped by $16.9 million over the same period in past fiscal year to $310 million. The amount raised for college scholarships dropped by $5.8 million to $59.9 million, Woosley said. In February, he cut his projection for net proceeds for college scholarships from $89.5 million to $82.7 million for fiscal 2014.

The lottery has helped finance more than 30,000 scholarships a year for Arkansas college students during the past four years.

Thompson said he appreciates that Woosley is trying to raise more money for scholarships, but an electronic-monitor game “seems to be a different game … than what we have seen before in Arkansas.

“It’s a different animal that we are introducing to try to push sales and run against national trends in lottery sales,” Thompson said. “I am not sure if a monitor game when you sit at a monitor and see whether you won or not [was] what the people were thinking of when they voted on [the constitutional amendment authorizing the lottery in 2008.

]”

He said he also wonders “if this is introduced, what happens in four years?”

“Is the Lottery Commission going to come forward and say “OK, we got to do something new now. People are [by that point] sick of the current monitor games,’” he said. “It almost seems to me like a race to the bottom where we have to constantly introduce new types of games to entice people to play.”

Woosley said he comprehends what Thompson was saying.

“I completely understand your argument, which is that people didn’t anticipate that we would play X, Y or Z game when they voted for the lottery,” he said.

Woosley, a lawyer, said he believes that the lottery law allows electronic-monitor games, but bars video lottery terminals.

But Sen. David Burnett, D-Osceola, also a lawyer, disagreed with Woosley, saying the Lottery Commission doesn’t have the legal authority to implement monitor games.

“It sounds to me like that you are .. ready to institute [the electronic games] regardless of what this body might have to say about it,” Burnett told Woosley.

Woosley said he’s sure that the commission will take lawmakers’ concerns into consideration.

Woosley, who has been the lottery’s director since February 2012 and plans to ask the 2015 Legislature to change state law to allow the purchase of lottery tickets with debit cards, said he doesn’t “want to look back whether I am here for another six months or 20 years and say I didn’t try to keep us relevant.”

He said he’s trying to operate the lottery like a business.

“If you go McDonald’s … they don’t just sell Big Macs and Quarter Pounders,” Woosley said, pointing out that the fast-food chain also sells coffee and chicken sandwiches.

“We got to grow. We got to diversify. We have to adapt,” said Woosley.

But Thompson said he’s worried about the lottery growing and adapting because “I don’t know where we are going.”

Sen. Stephanie Flowers, D-Pine Bluff, said she’s skeptical that the monitor games will generate new customers for the lottery.

“It seems like more and more we are growing more and more conservative. Why would you think this is going to bring more revenue?” she asked.

But Woosley replied that electronic-monitor games have been successful in much more conservative states than Arkansas, including Kentucky, and that retailers in Arkansas want to sell these types of games.

Lottery vendor Athens-Greece-based Intralot estimates the lottery could sell $6.8 million in tickets and raise $1.9 million for college scholarships with 100 retailers offering monitor games; sell $13.6 million in tickets and raise $3.8 million for scholarships with 200 retailers; and sell $20.4 million in tickets and raise $5.8 million with 300 retailers, according to a slide Woosley showed the committee Tuesday.

Flowers said some of her constituents consider gambling a sport.

“But it’s a difference when you are watching a dog or a horse running around a track as opposed to just buying a ticket and just for one second you scratch and one second you look at a monitor and … you don’t even get to dream about what if the horse crossed the line,” she said, referring to Oaklawn Park in Hot Springs and Southland Park in West Memphis.

“I am concerned about the poorest of Arkansans, particularly in my district, spending so much money on this lottery,” she said. “Even though I appreciate the purpose of scholarships, I really don’t see where we are getting the benefit of the money that we are putting in. It is very difficult for me to want to move forward and bring something else in to entice people to pull more money out their pocket and get a better return.”

Sen. Missy Irvin, R-Mountain Home, said she worries that electronic-monitor games are similar to a slot machine.

“The enticement is the instant gratification from that video screen. That’s what casinos use when you play a slot machine,” she said. “You are sitting in a tavern. You are drinking a beer. You are playing it over and over again because it is a natural enticement to see what happens next.”

After being hired in June 2009, then-lottery Director Ernie Passailaigue said he hoped the Arkansas lottery would offer keno, something the South Carolina lottery - where he had worked previously - didn’t do. But Democratic Gov. Mike Beebe and some lawmakers said they weren’t interested in offering keno, and the idea quietly fizzled.

Front Section, Pages 1 on 04/16/2014

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