Commission Meeting for 3/21/2013
 


Time, Date and Place:

The 177th meeting of the Idaho Lottery Commission took place on Thursday, March 21, 2013 at 10:00 AM at 1199 Shoreline Lane, Boise, Idaho 83702.

Attendees:

Commissioners Present:

Chairman, Roger Jones

Commissioner, Craig Corbett

Commissioner, Jim Rehder

Commissioner, David Keyes

Commissioner, Mel Fisher

Lottery Staff Present:

Executive Director, Jeffrey Anderson

Chief Operating Officer, Becky Schroeder

Deputy Director of Security, Amber French

Deputy Director of Sales, Mike Helppie

Deputy Director of Marketing, Sherie MoodySt. Clair

Sales Manager, Shannon Newhouse

Chief Financial Officer, Jay Prickett

Management Assistant, Jennifer QuinnoMiller

Public Information Specialist, David Workman

Others Present:

Sara Chase, Drake Cooper

Zeke Chemodurow, Intralot

Ryan Belveal, International Gamco

Brad Surkamer, CLM

1. Meeting Called to Order

Meeting called to order by Commissioner Jones at 10:00 AM.

2. Approval of the Minutes

Commissioner Fisher motioned to approve the minutes from the January 24, 2013 meeting. The motion was seconded by Commissioner Keyes. The vote was unanimous for approval.

3. Discuss Establishing a ViceChairman

The Lottery Chairman suggested that it would be prudent to name a ViceChairman of the Commission so that in the unlikely absence of the Chairman at a meeting, the ViceChairman would preside. Commissioner Corbett nominated Commissioner Fisher to become the ViceChairman. Commissioner Keyes seconded the nomination. The vote was unanimous; therefore, Commissioner Fisher has been named ViceChairman of the Lottery Commission.

4. Request/Assign Game Numbers for Tap Scratch Games

Addressed in agenda item #5.

5. Director Update

Director Anderson updated the Commission on the Administrative Rule changes and other legislation. We had a negotiated rule for our kioskbased instant ticket games that was approved in Senate State Affairs. The vote in House State Affairs ended deadlocked in a tie vote, which means the rule was approved. We are moving forward with planning for a July 1, 2013 rollout of what will be known as TAP Scratch Games.

Director Anderson incorporated agenda item #4 and described that since the Tap Scratch Games are the same as regular Scratch Games, we need game numbers for them. He asked the Commission for approval of game numbers 12100 – 12199. ViceChairman Fisher motioned for approval which was seconded by Commissioner Rehder. The vote was unanimous for approval.

Director Anderson reported our negotiated fee rulefor a convenience fee for use of debit cards in vending machines was rejected. We will no longer explore implementing debit cards in vending machines.

The third rule we proposed had to do with our claims process dealing with the sharing of the prize to clarify how the claim can be split amongst winners. This rule was approved.

We also proposed some clean up language relating to Charitable Gaming and those were approved as well.

Regarding statutory changes, we did have a proposed change to allow Idaho to join a potential World Game should there be one. It did not pass out of committee.

We had OPE recommendations to further define what goes into our Marketing budget but that proposed statutory change did not advance to the legislature.

The statutory request for an increase in the honorarium for the Commission did not advance to the legislature.

NonOPE statutory changes relating to Health and Welfare and Tax Commission setoffs passed unanimously in the Senate and has moved on to the House where we expect it to pas as well. It clarifies that when there is a setoff, the Lottery immediately transfers the money to Health and Welfare or the Tax Commission and if there is an appeal period, they are the ones the hold the money, not the Lottery.

We had some complicated OPE and nonOPE Charitable Gaming changes. It passed out of Senate State Affairs and the Senate and is now moving to the House.

Our budget passed both the Senate and the House and is being transmitted to the Governor unchanged as submitted.

Finally, H120 is a bill brought forward in House State Affairs. It passed out of Committee and did go to the House, passed and will be heard in Senate State Affairs on Friday. This bill would have initially prohibited the purchase of Lottery tickets by consumers with credit or debit cards. It would have also have prohibited the electronic transfer of money for the purchase of Lottery tickets by our retailers. We now have an amended version of the bill that has passed the House and is now moving to Senate State Affairs that would allow for the use of debit cards at the retail counter. It will still prohibit the use of credit cards at retail. And, it will allow for the electronic funds transfer to use from retailers when they buy tickets. It also specifically prohibits the use of debit or credit cards in our vending machines.

Director Anderson informed the Commission that the Mega Millions consortium is considering some game changes. First, after the starting $12 million jackpot, they have chosen to guarantee subsequent advertised jackpots, which they don’t do right now. They are also going to guarantee $1 Million minimum jumps in the advertised jackpot. They are also considering changes to the game matrix.

We are still working on a GeoSweep product, but are now onto a different plan where it would operate more like a licensed product (like our Scratch tickets) and work as a function of our VIP Club and be like second chance drawings with both Scratch and Draw tickets.

We signed the GTECH Printing contract this week and are working on negotiating with Pollard Banknote for their secondary printing contract.

Wyoming has approved a lottery for the first time in their history, which does cause some concern for us because we do get cross border play along the Wyoming border and there are also a number of Utah communities that may find Wyoming more convenient to buy their Draw Games than in Idaho. This week we convened a large group of people to strategically plan how we are going to respond.

As requested by Commissioner Rehder we have provided all of you with an electronic copy of our Tribal Gaming Compacts. The Lottery has no authority in terms of negotiating the Compacts. That is all done by the Governor and the Legislature. The Compacts and the Legislation does require monitoring the compliance of Prop. 2, which allows the tribal gaming machines. The Governor has always assigned that monitoring to the Lottery Director, which Director Anderson indicates he does. All of them are in compliance at this time. We are also responsible for making sure, where applicable, they set aside their 5% for local education and that they are distributing it. There is no set time table for when they distribute it, who they distribute it to, etc. That is all up to the respective Tribal Councils.

6. Quarterly Current Sales Report

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

7. Security Division Update

Deputy Director French reminded the Commission of the recent negotiations related to a new warehouse lease. We have finally agreed to a great lease which has been signed and we will be moving locations effective July 1st. The new facility is much nicer, about 20 years newer, and we will be saving approximately $25,000 per year in rent.

8. Sales Division Update

Deputy Director Helppie announced that all the new Liquor Store jackpot signs have been installed and are up and running and the project is complete. We are also now in four of the eight Kmart’s and working on the others.

9. Marketing Division Update

Deputy Director MoodySt. Clair brought the Commission up to speed on VIP Club updates. In 1999 the Idaho Lottery was the first Lottery to have a VIP Club. In 2003 we moved away from a vendor provided club to a custom designed club, which we have been operating from since. As we are looking with all of our upcoming marketing initiatives, we felt like we needed to update our club to keep up with industry offerings. We have an STP group working on it and put out a bid request. We had three proposals submitted. The new club will help us better serve our players and will have a more robust email and texting platform. We will also own the code once it is complete for security reasons. It also gives us leverage when plugging into other vendor solutions. The company with the best bid and the best price was Xtreme Consulting who is a local company.

10. Review of Charitable Gaming in Idaho

For the educational benefit of the Commission, Deputy Director French gave an overview of Charitable Gaming in Idaho as regulated by the Idaho Lottery.

11. Set Future Commission Meeting Date

The next Commission meeting has been set for May 30, 2013.

12. Adjournment

Commissioner Rehder moved to adjourn, seconded by Commissioner Keyes. With the vote unanimous, 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