New Hampshire Lottery Commission
March 18, 2008
Meeting Minutes:
NEW HAMPSHIRE LOTTERY® COMMISSION
14 INTEGRA DRIVE, CONCORD, NEW HAMPSHIRE 03301
MINUTES OF COMMISSION MEETING
RULES PUBLIC HEARINGS
TUESDAY, MARCH 18, 2008 1:30 PM
PRESENT:
Richard J. Campbell, Jr., Chairperson
Paul J. Holloway, Commissioner
Arthur P. Klemm, Jr., Commissioner
Rick Wisler, Executive Director
Diane Campbell, Administrative Assistant I
Georges Roy, Administrator III
Robert Preston, Games Manager
Maura McCann, Programs Information Officer
Patrick Griffin, Griffin York & Krause, Inc.
Rose Longo-White, Griffin, York & Krause, Inc.
Anders Ekman, Griffin, York & Krause, Inc.
Travis York, Griffin, York & Krause, Inc.
Moe Pepin, SGI
Douglas Parker, SGI
Tristin Craigue, The Dupont GroupCommissioner Campbell called the meeting to order at 1:30 p.m.
1. ACCEPTANCE AND SIGNING OF PREVIOUS MINUTES :
Commissioner Holloway made a motion, seconded by Commissioner Klemm, to approve the January, 2008 commission meeting minutes. So voted, unanimous.
2. RULES PUBLIC HEARINGS-1:35PM, Sw 4000, RULES OF NEW HAMPSHIRE HOT LOTTO;Sw 1000, RULES FOR ALL INSTANT GAMES; AND Sw 6000 RULES OF SECOND CHANCE DRAWINGS:
Commissioner Campbell opened the rules public hearings for any comments. As no public testimony was heard, the public hearing concluded.
3. COMMISSION VOTE TO APPROVE INITIAL PROPOSAL TO READOPT Sw 900, RULES OF LOTTERY INTERCEPT:
Commissioner Holloway made a motion, seconded by Commissioner Klemm, to approve the initial proposal to readopt Sw 900, Rules of Lottery Intercept. So voted, unanimous.
COMMISSION ACTION ON TWO YEAR OPTION TO RENEW GTECH’S INSTANT TICKET VENDING MACHINE CONTRACT
Director Wisler announced there was one 2-year renewal option remaining on the GTECH contract for instant ticket vending machine (ITVM) services. Approximately $26 million in sales are produced from the over 250 ITVMs. Research was conducted for a cost comparison between the GTECH contract and similar contracts with other lotteries. Director Wisler recommended that the one 2-year GTECH contract option be exercised.
Commissioner Klemm made a motion, seconded by Commissioner Holloway, to approve the 2-year option to renew the GTECH contract with the Lottery. So voted, unanimous.
5. TRI-STATE REPORT:
Director Wisler stated a discussion was held at the last Tri-State Commission meeting on possible Tri-State game changes. It was determined that a small window of opportunity would be available to make Tri-State game enhancements or changes. Director Wisler explained this is due to the fact that New Hampshire, Maine and Vermont are going out to bid at various times for on-line gaming services, and game changes cannot be made 6 months before or after a contract expires. The window of opportunity would be from October 2008 through January 2010. The Tri-State Development Committee in coordination with Scientific Games will be devoting much of their time on reviewing possible enhancements or changes to the Megabucks, Paycheck and Daily numbers games. The Commission inquired of the New Hampshire Lottery’s preference for enhancements or changes to the Tri-State games. Commissioner Klemm commended Moe Pepin of Scientific Games for a recent programming change made to the lottery terminals.
6. ADVERTISING:
A discussion was held on the re-development of New Hampshire Lottery’s logo for trademark. Two preferred logos were presented for Commission approval. Patrick Griffin of Griffin, York & Krause reviewed the two logos with the Commission and how each would tie in with website application and message advertising. The Commission emphasized the importance of communicating the fact that all lottery proceeds are distributed to Education and is now over $1 billion since the Lottery’s inception. A discussion was held on the development of a new corporate television advertising spot. The advertising agency will work with Maura McCann to develop an appropriate message for Commission recommendation.
Maura McCann updated the Commission on the New Hampshire Lottery Star promotion connected with the Replay program. Travis York of Griffin, York, and Krause stated that approximately 15,000 people have visited the NH Lottery Star link to the Lottery’s website; 22 videos have been approved and viewed over 9,000 times by Replay members; 500 Replay members have been involved in the rating process (73% of which are new Replay members); and 3,700 new Replay subscribers since launch began 3 weeks ago. Rose Longo-White reviewed the prizes connected with the NH Lottery Star program.
Mr. York stated over 10,000 Replay members have signed up to receive jackpot alerts. Surveys and demographic research were discussed. Rose Longo-White stated the PowerPlay promotion begins on March 30th. Patrick Griffin introduced Anders Ekman as the new Chief Executive Officer of Griffin, York and Krause.
Commissioner Campbell made a motion, seconded by Commissioner Holloway, to approve the two proposed lottery logos for trademark. So voted, unanimous.
7. DISTRIBUTION OF PRODUCT REPORTS:
Director Wisler stated the reports for ways to increase lottery revenues had been forwarded to the Commission.
8. OTHER BUSINESS:
Georges Roy, Administrator III, stated the 5 year Lottery building lease agreement effective May 1, 2008, was unanimously approved by Governor and Council. Mr. Roy stated the estimated April transfer to the Education Trust Fund for the March profits is expected to be over $8 million. Commissioner Klemm asked for an update on year to date sales after last weeks’ sales. Mr. Roy stated the 2008 Fiscal revenue projection of $79.5 million would be difficult to reach, because the transfer on Thursday for last month’s profits was only $5.3 million. Mr. Roy stated that approximately $58 million in revenue has been generated through the end of March, leaving approximately $21 million to meet the projected $79.5 million for the fiscal year.
The Commission pointed out a recent newspaper article regarding the legalization of casinos and expanded keno in Massachusetts. The Commission reviewed the status of the lottery’s revenues which indicated the possibility of the Lottery not being able to meet the budgeted goals for the first time in a number of years. Due to the Governor’s expectation of the $100 million lottery fiscal revenue transfer for Education, market competition, and slowing economic trends, it may be the time for the New Hampshire Lottery to pursue a more aggressive approach in addition to the traditional approach to increase lottery sales. A lengthy discussion was held on whether the lottery should go public with the projected realism that without expanded non-traditional lottery opportunities, such as keno and video lottery, the lottery may be unable to reach the $100 million projection from the Governor’s office. Since a comprehensive report submitted to the Commission and Governor approximately two years ago, overall lottery sales have been declining despite all efforts to increase sales.
Commissioner Holloway made a motion, seconded by Commissioner Klemm, to approve the issuance of a press release indicating that if lottery revenue goals are to be met, new gaming options must be considered. So voted, unanimous.
Director Wisler stated that 270 retailers had increased their sales from 12% up to 1300% over the past quarter and were eligible to receive the bonus commissions. Director Wisler recommended that the Commission continue with the 12% sales increase level for the next quarter. Commissioner Holloway made a motion, seconded by Commission Klemm, to approve the 12% level for the next quarter. So voted, unanimous. Director Wisler stated that there have been many retailers who have gone out of business over the past year. Robert Preston, Games Manager, announced that in the past 13 months, 110 retailers have closed their doors of which 68 have gone totally out of business for a loss of $4.3 million in sales.
Commissioner Campbell made a motion, seconded by Commissioner Klemm, to adjourn the commission meeting at 3:15 p.m. and move into the work session. So voted, unanimous.
Richard J. Campbell, Jr., Chairperson
Paul J. Holloway, Commissioner
Arthur P. Klemm, Jr., Commissioner