Commission Meeting for 5/18/2017
 


The 206th meeting of the Idaho Lottery Commission took place on Thursday, May 18, 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 Marketing, Sherie MoodySt. Clair

Public Information Specialist, David Workman

Interactive Media Specialist, Emily Palmer

Others Present:

Zeke Chemodurow, Intralot

Ryan Belveal, International Gamco

Brad Surkamer, CLM

Pat Sullivan, Sullivan Reberger

Costa Tsolakis, Intralot

Jeremy Pisca, Risch Pisca

Tom Donahoe, Mitchell+Palmer

Billy Mitchell, Mitchell+Palmer

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 March 16, 2017 Commission Meeting. Commissioner Corbett seconded the motion. The vote was unanimous for approval.

3. Director Update

Tenant Improvement Update

The tenant improvement process is finishing up and most of the remodel is done. Director Anderson reminded the Commission of the process which ultimately allowed all employees, with the exception of those in Security, to move to the first floor, which creates a much better working environment and allowed us to give back the old Security space. Going forward, lease payments will decrease by over $30,000 per year. We are very happy with all of the changes and think it will be really good for the Lottery going forward.

MUSL Game Changes

Director Anderson informed the Commission about some upcoming changes to current games. The Mega Millions group, a consortium of 11 nonMUSL lotteries which control the Mega Millions game, have decided on some changes for the game. Effective October 28, they will double the price, making a ticket $2 instead of $1, and very similar to Powerball, including the odds. They will be introducing a unique feature to the game called Just the Jackpot where you can get 2 plays (lines) for $3 and all you are playing for is just the jackpot. Many MUSL lotteries are deciding not to offer that feature at launch. We are currently undecided on whether or not we will participate in that feature depending on what our surrounding states do.

Hot Lotto is also scheduled to either change or cease in October. In its current form, the game performance is suboptimal. He reminded the Commission that a couple of years ago the jackpot was changed from an annuity to a cash option with taxes paid. The jackpot grows slowly and the number of players has diminished. Its sales are in decline and should there be no major changes to the game, we are inclined to pull out of the game in October. There is talk about switching to ball machines instead of a Random Number Generator.

Intralot Implementation Update

Becky presented the Commission with the update on the new Intralot Gaming System Implementation plan and described the complexity of the implementation plan that includes every deliverable named in the contract and the progress. Groups are currently working on a detailed training plan. Major deliverables, like specs for terminals, have already been signed and turned over to the developers. They are updating and transitioning the gaming database now as well and everything is on track at this point.

Director Anderson added that the updates to the Central Gaming System will be complete by the first week in August, which is the first element that needs to be changed out. This project is complicated but our last conversion back in 2007 went off without a hitch and we expect the same this time around.

Gift Cards

We have been presented with a Gift Card Program that we have been looking in to. Director Anderson’s has been working on a program with Roundpeak to offer gift cards to statesponsored lotteries. We have looked at programs like this in the past, but have always decided not to pursue it because of the cost. Roundpeak has come up with a way where there would be no cost to the Lottery. We think there are some opportunities here for us to get Idaho Lottery gift cards in the gift card racks which are highly penetrated in grocery stores, and this might be great for the Lottery. The cards would be branded with the Idaho Lottery branding and can be used only at Lottery retailer locations. If we move forward we want to be up and running by the holiday’s since this is biggest giftcardgiving season. We have run this by the Attorney General and there do not appear to be any issues with us in Statute. We are thoroughly looking at this program to make sure it is a good fit for us and the State.

Creative RFP Recommendation Marketing Contracts

In the last Commission meeting authority was granted to Director Anderson to move forward with discussions with Brad Surkamer for our marketing services Strategy contract. We were able to come to an agreement on an extension for another year. That contract does allow for perpetual extensions.

We also issued an RFP for the Creative services portion of our agency contracts and received three responses. A fiveperson committee then reviewed all of the written responses and those scores, combined with the scores on oral presentations by each bidder and pricing proposal scores determined the highest score. Mitchell+Palmer received the most points on their proposal and is therefore our recommendation to the Commission for the Creative Services contract which will run from July 1, 2017 to June 30, 2018.

Commissioner Michael moved to approve Mitchell+Palmer as the successful bidder for the Marketing Creative Services contract. Commissioner Brackebusch seconded the motion. The vote was unanimous for approval.

Strategic Planning

Director Anderson reported that he hosted an Executive Team Retreat last week and that the team and the Lottery is focused on strategy and fulfilling our mission going forward. It was very productive and when we meet for our dividend setting phone call at the end of June we would like to make sure you have a copy of our Strategic Plan that is due July 1. This year we are also including our Cyber Security initiatives into our Strategic Plan and we are looking forward to sharing that with the Commission, as well.

Detective Position

In the absence of the Deputy Director of Security, Director Anderson reported on the status of filling the new Detective position. We included in our last approved budget request the funding to hire a POST Certified Detective who will help us with investigations into fraud and other Lottery crimes. This position is very important to us at this time because the incidence of Lottery crime have not decreased and we need another person on board working these cases. The other reason this position is so important to us right now is that our current Deputy Director will be retiring in the next 18 months and we really need someone onboard and working the Lottery world to help us through the transition of her retirement. We had 36 applicants and interviewed nine people over the phone and then three in person. An offer has been made to a candidate from California and the tentative start date is June 5.

4. Quarterly Current Sales Report

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

5. Security Division Update

There was no Security Division report.

6. Marketing Division Update

Director MoodySt. Clair reported on updates from the Marketing Division. She reviewed the Research RFP that was issued. We had an evaluation team review the responses of four companies that were responsive to the RFP. The company that had the highest score was Vision Critical. Although we issued the RFP, as stated by their Contract, Intralot will manage this contract for us and ultimately pay for it. We have a lot of initiatives this year and having good data and research findings on our products and players will help us make them much more successful.

She also reviewed the new Idaho Lottery Mobile App that has been in the works for a long time and is now getting ready to launch. The App is free and can be downloaded from the Apple and Android App Stores. She also reviewed current and upcoming campaigns and media promotions.

As requested at the last Commission Meeting, Sherie gave a Social Media presentation and overview. She covered all of the Lottery’s social media websites, strategies and ways of tracking and using data using all of the Lottery’s social media channels.

7. Sales Division Update

Deputy Director Polowski spoke more about the Epic Upgrade conversion of the gaming system which he noted is an allconsuming, allencompassing project at the moment. They are working closely with Intralot on implementation and training schedules and trying to get the framework in place to ensure over 1000 retailers are happy by the time this is all said and done.

In the meantime we are still doing business as normal and executing some really good promotions including the Harley Davidson promotion with Maverick and the Oasis promotion for Dairy Days during the month of June in the Magic Valley.

We are also working on the Super Ticket which is a large 8 x10 ticket with four separate games/tickets on the big ticket. It is one of the more popular innovations in the world of scratch tickets in years and we are excited about it. We expect these to launch midJuly.

8. Set Future Commission Meeting Date

Commissioner Corbett moved to schedule the Dividend Setting Teleconference for June 29 at 10:00 and the next regularly scheduled meeting tentatively for July 20 in Boise, depending on the Governor’s schedule. The motion was seconded by Commissioner Kerrick. The vote was unanimous for approval.

9. Executive Session

Pursuant to Idaho Code §74206 (1)(b) Commissioner Corbett moved to enter in to Executive Session. Commissioner Kerrick seconded the motion. Via roll call, the votes were unanimous to move into Executive Session.

Commissioner Corbett moved to exit out of Executive Session, seconded by Commissioner Brackebusch. Via roll call, the votes were unanimous to exit out of Executive Session.

Commissioner Michael moved to approve recommending to the Governor an increase in the Director’s pay consistent with the Idaho Lottery FY18 Change in Employee Compensation (CEC) plan for employees receiving an “Exemplary” performance evaluation rating. The motion was seconded by Commissioner Corbett. The vote was unanimous for approval.

10. Adjournment

Commissioner Corbett moved to adjourn. Commissioner Kerrick 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