Commission Meeting for 5/15/2014
 
Time, Date and Place:

The 185th meeting of the Idaho Lottery Commission took place on Thursday, May 15, 2014 at 10:00 AM at 1199 Shoreline Lane, Boise, Idaho 83702.

Attendees:

Commissioners Present:

Chairman, Mel Fisher

Commissioner, Gary Michael

Commissioner, Susan Kerrick

Commissioners Present Via Phone:

Commissioner, David Keyes

Commissioner, Craig Corbett

Lottery Staff Present:

Executive Director, Jeffrey Anderson

Chief Operating Officer, Becky Schroeder

Deputy Director of Security, Amber French

Deputy Director of Marketing, Sherie MoodySt. Clair

Deputy Director of Sales, Shannon Newhouse

Chief Financial Officer, Jay Prickett

Management Assistant, Jennifer QuinnoMiller

Public Information Specialist, David Workman

Others Present:

Sara Chase, Drake Cooper

Brad Surkamer, CLM

Ryan Belveal, International Gamco

Zeke Chemodurow, Intralot

Tim Davis, Deputy Attorney General

1. Meeting Called to Order

Meeting called to order by Chairman Fisher at 10:00 AM.

2. Approval of the Minutes

Commissioner Michael moved to approve the minutes from the March 20, 2014 meeting. Commissioner Keyes seconded the motion. The vote was unanimous for approval.

3. Director Update

Director Anderson reminded the Commission of the conditional approval they gave at the last Commission meeting to move forward with two games, Lucky for Life and Monopoly Millionaire. There are 21 states committed to join Lucky for Life, which is currently played by 5 states in New England and is very successful. We have received the governance documents from the group. The cost will be minimal and MUSL will administer the game even though it will not technically be a MUSL game. The cost of the game is based on a percentage of sales where bigger states will pay a larger percentage of the game than smaller states. We tested this game last summer and it proved to be a very high performing game with our test group. We are looking for Commission approval to join the Lucky for Life Consortium and begin offering this game with a target launch date of January 2015.

Commissioner Kerrick moved to approve Lucky for Life beginning in January 2015. Commissioner Corbett seconded the motion. The vote was unanimous for approval.

Director Anderson then discussed the Monopoly Millionaires’ Club game. This game is a $5 draw game which also has a television component with it. We were hoping to have some governance documents and rules for the game, but so far, all we have is a draft. As it is drafted, there are portions that Director Anderson is uncomfortable with as of now, so while we were hoping to ask for the Commission’s approval to move forward with the game, that will be postponed while we await clarification.

He updated the Commission on Powerball changes being considered for 2015 which involved the promotional entry ticket and a change in the matrix. There are a number of other Directors who are more interested in watching these new games and see how they perform before committing to any major changes in the Powerball game.

He then discussed the Memorandum of Understanding between the Idaho Lottery and International Gamco for the Portable Touch Tab game that we were going to pilot. We met with Gamco last week and they are suggesting we push this out to later in the fall. We have amended the MOU for a start date of October 31 instead of May 31 of 2014. We are currently performing acceptance testing.

The Wyoming Lottery has announced they will start selling tickets on August 24, 2014. They are only offering Powerball and Mega Millions and Intralot is the gaming system vendor of record for them. Our border retailers are still not very concerned about it. It could still cannibalize a little of our business at the border, but we are still feeling that it will not have a major impact on our sales.

There was a Class Action Law Suit filed in Coeur d’Alene for Dairy Queen vs. Idaho State Insurance Fund. Somehow State agencies have been included into the class and we had to make a declaration of whether we wanted to be in the class or excluded from it. Director Anderson and the Chairman had a previous discussion about it and executed the proper paperwork to exclude the Lottery from the class.

During the last Commission meeting we talked about some legislation pending in the US Congress. The Wire Act Fix has been discussed and they are trying to roll back to a time before Lottery’s could participate in online gambling. This would affect our ability to sell lottery from our vending machines and require that transactions take place human to human only. A large chunk of our sales come from vending machines so we are working closely with vendors and MUSL to stay on this.

We are in the process of developing our Strategic Plan that is due to the State on July 1, 2014. We are working on a draft and will give the Commission an opportunity to review it before submitting it in July.

Director Anderson discussed some changes in employee compensation that the Legislature has approved and brought the Commission up to speed on what is happening with the Coeur d’Alene tribe.

4. Quarterly Current Sales Report

The sales report is entered into the minutes as an attachment. Jay Prickett discussed the dividend and sales projections for next year.

5. Mareketing Division Update

Deputy Director MoodySt. Clair informed the Commission of recent awards won by the Idaho Lottery for the Rockies, current promotions and campaigns and the new “How to Play” project. The new “How to Play” project has been bid by Drake Cooper for a cost of $49,370. She asked the Commission for approval to move forward with the project. Commissioner Kerrick moved to award the “How to Play” project to Drake Cooper. Commissioner Michael seconded the motion. The vote was unanimous for approval.

She went over the new Marketing Plan for the year and the 18month rolling calendar with them and discussed the 25th Anniversary events and the live Powerball draw.

6. Sales Division Update

Deputy Director Newhouse gave a brief report on the Sales Division. She reviewed sales and talked about retailer open houses that are planned this summer around the State. She also discussed the startup of the Wyoming Lottery and reassured the Commission we are watching it closely.

7. Security Division Update

Deputy Director French outlined happenings the Security Division, and reviewed some Charitable Gaming cases. She discussed the case against the charity Hunting Just for Kids and informed the Commission that the case has been filed in District Court.

8. Executive Session

Pursuant to Idaho Code § 672345 (1)(b) Chairman Fisher moved to enter in to Executive Session. Commissioner Michael seconded the motion. The vote was unanimous to move into Executive Session.

Commissioner Keyes moved to come out of Executive Session. Commissioner Kerrick seconded the motion. The vote was unanimous to move out of Executive Session.

The Commissioners all agreed to sign a letter of recommendation to the Governor for CEC salary adjustments for Director Anderson.

9. Set Future Commission Meeting Date

The dividend setting conference call has been set for Thursday, June 26, 2014 at 10:00 AM. The next regularly scheduled Commission Meeting has been tentatively set for Tuesday, July 15, 2014 at 9:30 a.m.

10. Adjournment

Commissioner Michael moved to adjourn the meeting, seconded by Commissioner Kerrick. The vote was unanimous and the meeting was adjourned.

Certification:

I hereby certify that the foregoing minutes are a true and correct record of the actions and decisions made by the Lottery Commission.

Jeffrey R. Anderson, Executive Director

Lottery Commission Secretary