The Arkansas Scholarship Lottery's proposed five-year, $34.5 million advertising contract with the Little Rock firm of CJRW cleared the Legislature's Joint Budget Committee on Thursday with little discussion.
With a couple of lawmakers dissenting in a voice vote, the committee approved its Performance Evaluation and Expenditure Review Subcommittee's recommendation. The subcommittee voted 14-4 Tuesday to complete its review of the contract. Last week, the subcommittee decided by voice vote not to review the contract, so the budget committee referred the matter back to the subcommittee for further consideration this week.
"We understand and welcome the scrutiny and appreciate the favorable review," lottery Director Bishop Woosley said in a written statement issued after the budget committee's meeting Thursday.
"This is a very busy time of year for the lottery and we are happy to have the opportunity to move forward and work with CJRW," he said. The lottery's advertising contract with Mangan Holcomb Partners expired earlier this month.
Woosley said he hopes the lottery and CJRW execute the proposed contract "hopefully very soon," after ensuring all requirements of the state's procurement regulations and lottery's request for qualifications for advertising companies are satisfied.
Asked why it's in the best interest of the lottery to contract with CJRW, and why it won't be a conflict of interest that CJRW also works for Oaklawn Racing and Gaming, Woosley said, "It was the decision of the three evaluators, based on their review of the RFQ [request for qualifications] responses and the oral presentation that CJRW was best suited to help us with the huge initiatives we have over the next few years.
"I trust their informed judgment and opinions and look forward to working with CJRW. We were very excited about the quality of firms who responded and grateful for their interest in being a partner with the lottery," Woosley said.
Woosley said he selected the three evaluators: Arkansas Economic Development Commission project consultant Esperanza Massana, lottery marketing director Donna Bragg and Parks and Tourism Department Director Joe David Rice.
Office of State Procurement Director Edward Armstrong has rejected protests filed by CJRW's rivals for the contract -- Mangan Holcomb Partners and a partnership bid by the Little Rock firms Ghidotti Communications and Vines Media.
Sharon Vogelpohl, president of Mangan Holcomb Partners, said in a written statement Thursday, "The next step, per procurement, is the disclosure of conflicts of interest and we will be acutely interested in how those will be addressed.
"From our more than two years of experience working with the lottery in support of the Camelot 5-year strategic plan, having one advertising agency representing both Oaklawn and the Lottery is a clear conflict of interest and not in the best interest of the state."
Natalie Ghidotti, president and chief executive officer of Ghidotti Communications, said she met with Woosley and Armstrong "to discuss our concerns, and I am confident that we will see improvement in how future bid solicitation documents are worded.
"As for the question of a conflict of interest, Mr. Armstrong, Mr. Woosley and I agree to disagree on this," Ghidotti said Thursday in a written statement. "There is a conflict of interest here, and I'm concerned that the state has paid more than $2 million to a consultant [Camelot Global Services] to tell them that, yet the issue is being ignored."
Gary Heathcott, a consultant with CJRW, declined to comment Thursday, saying only, "At the present time, we still do not have an executed contract and must continue to abide by the rules set forth by state procurement officers on Nov. 18 at the oral presentations."
In July 2014, the Legislature enacted a law, sponsored by Sen. Jimmy Hickey, R-Texarkana, to temporarily bar the lottery from offering electronic monitor games until March 2015. At that time, Oaklawn's lobbyists worked with Hickey and other lawmakers opposed to the lottery implementing electronic monitor games, such as keno and quick draw, that could compete for gamblers' dollars.
Last month, Department of Finance and Administration spokesman Jake Bleed said the lottery's five-year business plan states that in fiscal 2020, it should focus on building a case for new product innovation that may include monitor games.
Woosley said Thursday, "We do not currently have monitor games in our business plan."
During his 2014 gubernatorial campaign, Gov. Asa Hutchinson said he opposed allowing the lottery to offer electronic monitor games.
The lottery has helped finance more than 30,000 scholarships during each of the past seven fiscal years. The lottery started selling tickets on Sept. 28, 2009.
Revenue and net proceeds for college scholarships peaked in fiscal 2012 before dropping each of the three subsequent fiscal years. In fiscal 2016, revenue and net proceeds increased over the previous fiscal year with the help of a world-record Powerball run in January 2016.
A Section on 01/27/2017