Proposed Study Of Arkansas Lottery Practices To Go Before Legislative Council

Sep 18, 2014

Camelot Global Services executives Richard Wheeler and Sam De Phillippo speak to the Lottery Oversight Committee Thursday.
Credit Michael Hibblen / KUAR News

A proposal to hire an outside consulting firm to evaluate the Arkansas Scholarship Lottery is to go before the Arkansas Legislative Council Friday. Lawmakers are concerned that lottery revenue has been declining for the last couple of years and have been pushing for the assessment.

Executives with Camelot Global Services, which lawmakers are considering hiring without taking bids from other companies, spoke Thursday before the lottery's legislative oversight committee.

"We will do a deep-dive situational analysis, which is to understand and measure where the lottery is compared to its peers, and we consider its peers to be other southern lotteries," said Sam De Phillippo, a senior consultant for the firm.

He told the panel a report could be completed by the end of next month and provide recommendations to first stabilize revenue, then start growing it again.

De Phillippo's company was not among two that submitted bids by an August 18 deadline set by the Arkansas Lottery Commission. 

Camelot Global Services has conducted similar evaluations for other state lotteries, which was cited by Sen. Jimmy Hickey, a Republican from Texarkana, as a reason for hiring it, rather than taking other bids.

"There may be a lot of people out there that have some ideas with methodology and things like that, but if we’re truly going to do a turnaround on this entity, we feel like we need somebody that has been involved in the business quite a few years and knows all the ins and outs," Hickey said.

Hickey has been a frequent critic of the lottery and led a successful effort earlier this year to delay the lottery from expanding into keno-style games, where participants can watch drawings every few minutes on video monitors.

De Phillippo told lawmakers he doesn’t feel the Arkansas lottery has been around long enough to make that expansion.

"We have seen it time and time again that monitor games go into lotteries before their time. Georgia was a perfect example.  They struggled with it for 10 years and it did hardly any volume. You really have to be strategic about it and need to be part of a long-term plan," De Phillippo said. 

Arkansas Lottery Director Bishop Woosley at Thursday Legislative Oversight Committee.
Credit Michael Hibblen / KUAR News

Lottery Director Bishop Woosley had been pushing for monitor games as a way to get more people taking part and prop up sagging revenue.

After the meeting, Woosley told reporters he took issue with De Phillippo’s assertion.

"Unfortunately, we are a mature lottery because we rolled out so much stuff in the beginning. We matured so much more quickly than a normal lottery. So, what I think he was talking about is a lottery that’s 10 or 15 years old. Well, kind of in dog years so to speak, we are, so I wouldn’t disagree with it, but I think if he comes in and visits with us, he’ll look at our portfolio and look at what was rolled out in the first two years and say, yeah, you’re a mature lottery. Now, whether or not you should have rolled out monitor games may be something else,” Woosley said.

The launch of monitor games has been delayed until March, to give the Arkansas Legislature a chance to consider the issue during next year’s session, which begins in January.

The company would be paid a consulting fee of nearly $150,000, plus up to $20,000 in travel expenses.

During a second legislative hearing Thursday, a Legislative Council subcommittee recommended that the contract be approved without seeking additional bids.

The full Arkansas Legislative Council is to meet at 9 a.m. Friday morning to decide the matter.