Commission Meeting for 3/16/2017
 


Time, Date and Place:

The 205th meeting of the Idaho Lottery Commission took place on Thursday, March 16, 2017 at 10:00 AM at 1199 Shoreline Lane, Boise, Idaho 83702.

Attendees:

Commissioners Present:

Chairman, Mel Fisher

Commissioner, Gary Michael

Commissioner, Susan Kerrick

Commissioner, Craig Corbett

Commissioner, Grant Brackebusch

Lottery Staff Present:

Executive Director, Jeffrey Anderson

Chief Operating Officer, Becky Schroeder

Deputy Director of Sales, Larry Polowski

Management Assistant, Jennifer QuinnoMiller

Chief Financial Officer, Jay Prickett

Deputy Director of Security, Amber French

Deputy Director of Marketing, Sherie MoodySt. Clair

Lottery Staff Present Via Telephone:

Public Information Specialist, David Workman

Others Present:

Zeke Chemodurow, Intralot

Ryan Belveal, International Gamco

Scott Henneman, Oasis Gaming/International Gamco

Brad Surkamer, CLM

1. Meeting Called to Order

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

2. Approval of the Minutes

Commissioner Michael moved to approve the minutes of the January 19, 2017 Commission Meeting. Commissioner Kerrick seconded the motion. The vote was unanimous for approval.

3. Director Update

Legislative Update

Entering into the 2017 Legislative Session, the Lottery had no statutory or rules changes proposed at the Statehouse. However, there were a number of bills introduced that we had to respond do. House Bill 28 was introduced in House State Affairs that would have prohibited the use of our TouchTab machines. It made it out of the House State Affairs Committee but was was defeated 1852 on the House floor. House Bill 57, sponsored by Chairman Loertscher, required the Lottery to follow the law in its procurement. The bill was unnessary because we are already required by statute to follow the law which we already do. Several sections of Idaho Code in our enabling legislation specifically reference the need for our agency to follow the law in our operations, including procurement. It passed the House and the Senate and will be signed by the Governor. There was no need for us to oppose it because it was redundant and we do follow the law.

House Bill 95, sponsored by Representative Luker, addressing winner optin/optout for publicity and proposed complete winner anonymity of winners. To Representative Luker’s credit, he did work with the Lottery to make the bill better by addressing key points in who needs to be notified of winners (i.e. MUSL) and he changed the total anonymity to a six month period after claiming a prize. We opposed any change in public disclosure of who is paid prizes with public money. Rep. Luker stated he had a constituent who had been harassed over her winnings, although he did not disclose who the person was when asked. This was of concern to us since winner’s names and where the ticket was purchased is public information and if someone was being harassed, we wanted to be sure we followed our own procedures. This bill passed House State Affairs, passed the House. When it was considered by Senate State Affairs it failed to make it out of Committee on a 18 vote. We believe transparency in Government is important and we wanted to protect that. As it is right now, if players wish to opt out of publicity, our claim form allows for that and all they have to do is let us know.

We were affected on the periphery of H127, dealing with Tribal Gaming, due to our regulatory oversight responsibility of their machines. This bill did not make it out of Committee.

Our budget bill passed the House this week and it is headed to the Senate. We don’t expect any issues.

Agency Contracts

Several years ago we experimented with splitting our Marketing Agency contracts into three different areas, which has worked really well for us. We have a media placement contract with CLM that runs through December 31, 2017. The other two are Creative, held by Mitchell + Palmer, and Strategy also held by CLM. Those two contracts expire at the end of June with a clause that allows for extensions. Mitchell + Palmer would like to extend their contract and continue to work with us but wanted a change in compensation. Any material change in more compensation requires us to go to bid. The Lottery requests approval for going out to bid for the Creative portion and intend to publish the RFP by March 30. This allows a 30 day period for interested parties to present bids. Commissioner Michael moved to approve going out to bid for Creative Services. Commissioner Kerrick seconded the motion. The vote was unanimous for approval.

The third component of the Marketing Advertising contracts is for Strategic portion which is currently with CLM. CLM is amenable to a lower price for a continued contract. We are asking the Commission for the authority to negotiate with CLM on lowering the price and if we are unable to come to an agreement, we will go out to bid.

Commissioner Kerrick moved to approve permission for the Lottery to begin negotiations with CLM on a new, lower, contract price for Strategy. Should they be unable to come to an agreement, the Lottery will go out to bid. Commissioner Corbett seconded the motion. The vote was unanimous for approval.

Scratch for Schools

Director Anderson gave the Commission a brief overview and reminder of Scratch for Schools program. Contrary to what some Legislators think, it isn’t “cash for kids” and children aren’t scratching tickets. This is an event that takes place in the fall and started out very small. However, it has grown significantly and schools have come to love it. They get very excited about it and look forward to it every year. It started out with about 44 schools and two event locations and has now grown to over 400 schools who participate in events all over the State. This last year almost $100,000 in prize money was won by participating schools and this money has become very valuable and meaningful to them. Only adults over the age of 18 are able to be present and participate. Children and those under 18 are not even allowed in the areas where the event is taking place.

Other

Director Anderson reported that the conversion with Intralot is going well and at this point is on schedule. Also, we are actively managing our prize expense within the product portfolio as we always do and it is an ongoing process.

Lastly, MUSL is working on a solution for “inlane” ticket sales where you could buy a ticket inlane at grocery stores on plain paper (register/credit card receipt paper). The last portion of this solution is trying to figure out how we get all of the different POS systems to securely connect to Lottery Central Gaming Systems. MUSL has been working with all of gaming system vendors in the United States to create a common Application Programming Interface (API) that will allow systems to speak to one another and create transactions and do reporting, etc. They have made great progress and we are almost there!

4. Security Firewalls Review

Zeke Chemodurow provided the Commission an overview of the gaming system security and firewall set up and detailed the protection and precaution that is taken by Intralot to make sure it is protected and safe from exploitation.

5. Quarterly Current Sales Report

Chief Financial Officer, Jay Prickett reviewed the current sales report and the Quarterly Current Sales Report are entered into the minutes as an attachment.

6. Security Division Update

Deputy Director Amber French updated the Commission on the process of hiring a new Detective with the possibility of a succession plan for the Deputy position. So far we have had 14 candidates apply and of those, 7 are qualified. It is open until the 6th of April and we are hopeful to get more qualified candidates. So far we are happy with the turnout and hope it continues. We are hoping to have someone on the ground by June.

Amber presented the Bingo/Raffle Annual Report to the Commission.

7. Marketing Division Update

Deputy Director MoodySt. Clair provided a marketing division update. We issued an RFP for Research on February 28 and the proposals are due March 28. We plan to present the Director’s recommendation at the May meeting.

Draw Station contracts are coming to a close at the end of June and we are currently doing analysis on whether or not we want to keep it the same or change things up. If we make changes, the advertising agency would issue the RFP.

Right now we have Idaho Cash selling close to our goal and it continues to grow each week. We are just a few hours away from launching our St. Patrick’s Day Raffle. Coming up as well is our Name that Scratch Game promotion where players can submit their ideas for ticket names and the winner will be involved in the design of the ticket and then they are given credit on the ticket.

8. Sales Division Update

Deputy Director of Sales updated the Commission on the “Epic Upgrade” which is the name given to the process of updating all of our gaming equipment as a result of our new contract with Intralot. The process is coming along and on schedule. They have also been working on finishing up the specifications for the new Sales Force Automation System through Gem Intelligence which they are very excited about. This product will greatly improve how the Sales Reps do their jobs, supporting their retailers and providing inventory management.

We are also continuing to make progress on our Retailer Initiative program. We are making great strides with chain retailers such as Albertsons and Maverik.

9. Set Future Commission Meeting Date

Commissioner Kerrick moved to set the next meeting date for May 18 in Boise. Commissioner Brackebusch seconded the motion. The vote was unanimous for approval.

10. Adjournment

Commissioner Corbett moved to adjourn. Commissioner Michael seconded the motion. 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