Commission Meeting for 11/12/2013
 


Time, Date and Place:

The 182nd meeting of the Idaho Lottery Commission took place on Tuesday, November 12, 2013 at 10:00 AM at 1199 Shoreline Lane, Boise, Idaho 83702.

Attendees:

Commissioners Present:

Chairman, Mel Fisher

Commissioner, David Keyes

Commissioner, Jim Rehder

Commissioner, Craig Corbett

Commissioner, Gary Michael

Lottery Staff Present:

Executive Director, Jeffrey Anderson

Chief Operating Officer, Becky Schroeder

Deputy Director of Security, Amber French

Deputy Director of Sales, Shannon Newhouse

Deputy Director of Marketing, Sherie MoodySt. Clair

Management Assistant, Jennifer QuinnoMiller

Chief Financial Officer, Jay Prickett

Public Information Specialist, David Workman

Charitable Gaming Coordinator, Angie Vitek

Others Present:

Cathy Matson, GTECH Printing

Sara Chase, Drake Cooper

Tim Davis, Deputy Attorney General

Scot Phillips, Eide Bailly

Jeremy Pisca, Risch Pisca

Brad Surkamer, CLM

Ryan Belveal, International Gamco

Jeremy Chou, Givens Pursley

Zeke Chemodurow, Intralot

1. Meeting Called to Order

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

2. Approval of the Minutes

Commissioner Keyes moved to approve the minutes from the July 16, 2013 meeting as well as the September 19, 2013 minutes. Commissioner Rehder seconded the motion. The vote was unanimous for approval.

3. Financial Statement Review

Scott Philips with Eide Bailly presented the Financial Statements. He indicated there were no changes and no adjustments.

Mr. Philips walked the Commissioners through the report, pointing out areas of importance or interest. The financial statement audit report is entered into the minutes as an attachment.

Commissioner Corbett moved to approve the Financial Statements. Commissioner Rehder seconded the motion. The vote was unanimous for approval.

4. Director Update

Director Anderson updated the Commission on Federal initiatives to regulate Internet gaming. He reminded them that U.S lotteries have taken an official position of retaining states’ rights in the regulation of gaming since it has always been a legacy state right according to the 10th Amendment to the Constitution of the United States. This allows individual states to determine, based on the sensibilities of their citizens, what kind of gaming, if any, takes place within their borders. There have been a number of initiatives from members of Congress brought forth, but nothing has been advanced out of either the House of Representatives of the Senate. The NASPL Government Relations group meets regularly to get updates on this issue.

Director Anderson also mentioned he serves on the Security and Integrity Committee for MUSL and informed the Commission they have been working for some time on a way to provide more secure transactions at retail. The Idaho Lottery has agreed to be a beta test site for the newest technology known as the “Black Box” that uses modern transaction monitoring techniques. COO Becky Schroeder explained that this new method will provide a way to make transactions more secure with the ability to move away from the outdated technology requiring specialized paper, ultimately making the process more economical and secure.

Director Anderson went on to describe new opportunities for sales that could come from marking transactions electronically via the ”Black Box”. The opportunities being explored within the industry include the ability to sell lottery tickets at gas pumps, ATMs, and inlane checkouts.

He reminded the Commission on what is happening with Geonomics, the group introducing GeoSweep. This company is from the United Kingdom and is presenting a new second chance play style that we are considering linking to our instant ticket games. They will be here in December to present more details. We already do second chance draws through nonwinning tickets and this is considered the same.

We are also reviewing the potential to join a new national game,“Lucky for Life”, which could fill a gap between games like Hot Lotto and our big jackpot games Powerball and Mega Millions. It is currently played in several New England states.

There is a change coming in January regarding the Powerball Power Play option. Power Play will return to a 2x5x variable multiplier for nonjackpot prizes.

Additionally, MUSL has research in the field on a potential Powerball promotional feature to enhance game play by adding noncash, experiential prizes that extend the value of the game for players. Once that research comes back we will be sharing it with the Commission.

Director Anderson reminded Commissioners about the next NASPL Annual Conference coming up in September 29 – October 3 of 2014 in Atlantic City, New Jersey.

The Lottery has been contacted by the Idaho Licensed Beverage Association (ILBA) regarding illegal games that remain in the marketplace. They are interested in defining what is an illegal machine and finding a way to make sure everyone in the bar and retaurant business is following the law.

We have some statutory and rule changes coming forward in the next legislative session relating to the Office of Performance Evaluations audit that was performed a year ago. This will conclude that process.

5. Quarterly Current Sales Report

The sales report is entered into the minutes as an attachment.

6. Security Division Update

Deputy Director French explained to the Commission that the Lottery just successfully completed our Disaster Recovery (DR) failover test. For a full week we switched over completely to our DR site in Helena, Montana and operated fully from there for that time. People were able to go and test work speed and productivity from our local DR site, at the Idaho State Liquor Division on Beachcraft Court in southwest Boise and everything functioned well.

She informed the Commission there is a possibility there will be a Charitable Gaming hearing in December. We have issued civil penalties to a nonconforming charitable group and anticipate it could be going to a hearing.

She explained to the Commission that the Lottery has changed the way they assess civil penalties and after clarifications have been made to the statutes are working to develop a standardized system for assessing the penalties.

7. Marketing Division Update

Deputy Director Sherie MoodySt. Clair presented and reviewed the newest Marketing Plan to the Commission, highlighting sales, campaigns, events, advertising, etc. She reviewed the Holiday television spots as well as the latest Powerball campaign. David Workman provided a recap of this years’ record setting Scratch for School’s campaign and events.

8. Sales

Deputy Director Shannon Newhouse provided a quick review of happenings in the sales department. She informed the Commission that they are working with our retailer customers to provide better sales support.

9. Selection of Vice Chairman

Commissioner Rehder nominated Commissioner Keyes, the next, longesttenured commissioner to serve as the unofficial Vice Chairman of the Commission in order to allow for a member to run the meeting in the event the Chairman is unavailable. Commissioner Corbett seconded the nomination. The vote was unanimous in support of David Keyes becoming the Vice Chairman.

10. Set Future Commission Meeting Date

The next Commission meeting has been set for January 23, 2014.

11. Executive Session

Pursuant to Idaho Code 672345(1) (b) and (d). Commissioner Rehder moved to enter in to Executive Session to discuss attorneyclient priviledge information and a personnel matter. Commissioner Corbett seconded the motion. The roll call vote was unanimous to move into Executive Session.

Commissioner Corbett moved to come out of Executive Session, seconded by Commissioner Rehder. The roll call vote was unanimous to move out of Executive Session. No action was taken and no decisions were made.

12. Adjournment

Commissioner Keyes moved to adjourn, seconded by Commissioner Rehder. The vote was unanimous to adjourn.

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