Tri-State Lotto Commission
July 11, 2008
Meeting Minutes:
TRI-STATE LOTTO COMMISSION
CONCORD, NH
July 11, 2008, 10:30 a.m.
Present: Thomas Scala, Vermont Lottery Commission
Orland McPherson, Maine State Lottery
Alan Yandow, Vermont Lottery Commission
Rich Sperlazzi, Maine State Lottery
Rick Wisler, New Hampshire Lottery Commission
Mary Cassani, Vermont Lottery Commission
Hadley Melendy, Vermont Lottery Commission
Lisa Rodrigue, Maine State Lottery
Maura McCann, New Hampshire Lottery Commission
Kassie Strong, New Hampshire Lottery Commission
Robert Preston, New Hampshire Lottery Commission
Liz Dimmick, Scientific Games
Darrell Frecker, Scientific Games
Karl Fortman, Scientific Games
Moe Pepin, Scientific Games
Russ Leonard, NL Partners
Chris Nichols, NL Partners
John Ripley, NL Partners
The meeting was called to order by Chair Scala at 10:30 a.m.
ACCEPTANCE OF THE JUNE 6, 2008 MINUTES
A motion was made by Commissioner McPherson to accept the June 6, 2008 minutes as distributed. Motion was seconded and voted in the affirmative.
FINANCE COMMITTEE REPORT – Mary Cassani
Gross revenues through May have increased $5.8 million, or 9.37% compared to last year. Of this increase, Megabucks sales are up $4.15 million, or 14.14%; Daily Numbers sales are down $780,000, or 3.60%; Paycheck sales are down from the combined Triple Play and Paycheck sales from last year $172,243, or 2.20%; the Promotional Fast Play games are down $68,349, or 1.97%.
Total Profit through May 2008 increased from last year $1,910,968, or 9.11%.
Comparing what we have budgeted through May, our sales are ahead of forecast in all three states by a total of $4,072,789. Due to increased sales, cost of sales is also over budget by $2,504,542. All three states have so far under spent their operating budgets this year by a total of $1,004,071. June has seen a flurry of advertising invoices submitted totaling approximately $640,000.
Most contingency funds are in the positive at the end of April except for the Fast Play games and expired, unclaimed prizes are $1.4 million.
Since last month the commission approved the Double Draw Dollars promotion for the Pick 3 and Pick 4 games. The committee would ask the commission to approve a $1.4 million allocation of expired, unclaimed prizes for promotions for FY09. This is the same amount allocated last year. Splitting the expired, unclaimed prizes based on FY08 year-to-date sales, the allocations would be Maine 47%, or $658,000, New Hampshire 36.5%, or $511,000, and Vermont 16.5%, or $231,000.
MOTION
A motion was made by Commissioner McPherson to allocate $1.4 million from expired, unclaimed prizes to fund the Double Draw Dollars promotion for the Pick 3 and Pick 4 games. Motion was seconded and voted in the affirmative.
DRAW COMMITTEE REPORT – Maura McCann
Tri-State Draw Audit Contract Extension with Anderson & Cloues: The committee went out to bid in March of 2006 for Draw Audit Services and received three bids. Anderson & Cloues won the bid for a two year contract with a two-year extension. As of the end of June 30, 2008 the original two-year contract was up. The committee requested the commission to extend the contract with Anderson & Cloues for the additional two years.
Smartplay International Maintenance Agreement: The yearly maintenance is due to be conducted on all pieces of drawing equipment. Normally the price would be $2,100 to $2,200 plus transportation costs. Due to additional draw equipment for Weekly Grand and some replacement items, it is expected this maintenance will cost $2,556.
MOTION
A motion was made by Commissioner McPherson to extend the Draw Audit Contract for two years with Anderson & Cloues. Motion was seconded and voted in the affirmative.
MOTION
A motion was made by Commissioner McPherson to contract with Smartplay International for yearly maintenance on all Tri-State draw equipment at a cost of $2,556. Motion was seconded and voted in the affirmative.
MARKETING COMMITTEE – Maura McCann
The press clip report was distributed.
DEVELOPMENT COMMITTEE – Maura McCann
Monday starts the Double Draw Dollars promotion on Pick 3 and Pick 4. We are in hopes the evening players will start playing the afternoon Pick 3 and Pick 4 games. The promo will run from July 13th through the 26th. Players must purchase, at a minimum, a day and evening or evening and day ticket for Pick 3 or Pick 4 in order to qualify to win $25.00 instantly. Maine and New Hampshire will each use about $70,000 and Vermont $50,000 with funds coming from the expired, unclaimed prize fund. Once the promotion is over, staff will conduct a sales analysis and report back to the commission.
The three states shared their various promotional material.
Double Header, the Fast Play game that’s been on sale since May 19th, is not doing quite as well as it did last spring, nor other Fast Play games we’ve offered. Fish for Cash is scheduled to go out August 18th.
The committee is now looking at a replacement game for Megabucks at a $1 and $2 price point.
The committee is waiting for the final SRS for Weekly Grand. Part of this game features an instant win and part of the instant win is based on randomness. Maura will work with GLI to provide the independent analysis of the RNG that will award the instant win for Weekly Grand.
The game plan that was in place for the replacement of the Paycheck game as well as our replacement for Megabucks and the enhancement to Pick 3 and Pick 4 are in a state of flux right now due to the decision that changes are being made to Powerball which will occur in January.
Weekly Grand is now scheduled for May of 2009 rather than late fall of 2008. States were planning on this additional revenue. The commission requested an explanation from Scientific Games as to what is causing this delay and how are we going to get back on track with all the proposed game changes and enhancements.
Darrell spoke for Scientific Games. The Weekly Grand game development has been discussed for the past few months at great length within operational and software management staffs of SGI. The possibility of co-development of Powerball and Weekly Grand introduces some internal challenges and risks that have been identified. This would require one software team developing a Weekly Grand release and a different software team developing a Weekly Grand and the Powerball to meet the accelerated schedule. The team developing both the Weekly Grand and Powerball game changes would need to assure all issues identified during the Weekly Grand QC testing, site testing and UAT were also corrected and re-tested for the Weekly Grand game during the Powerball QC testing, site testing and UAT. This introduces a significant risk of introducing software which did not meet all requirements. It also introduces the risk of not being able to meet the release schedule to accomplish Powerball. Powerball is complex in that it encompasses many states, different systems and terminals, etc. It is critical that nothing happens to get missed during the co-development and testing which would jeopardize the system integrity and player confidence in the lottery.
SG is proposing to take the Powerball release as soon as it completes the Development and QC testing phases and use this baseline to start the Weekly Grand development. The Powerball development and QC testing should run from August 1st to December 15th. Powerball will then launch in early January, 2009. SG will go through the normal Weekly Grand development, QC testing, site testing and UAT for that game. We have a proposed date of March 31, 2009 where we would be able to deliver the Weekly Grand software ready for a launch. SG feels with this schedule they will have taken the prudent steps to minimize risks and still be able to escalate this release in a timely fashion. From there we can go through with the Megabucks and Daily Numbers releases and there is adequate time to do it before December 2009. SG can’t put dates to when each succeeding release will take place until we identify a Megabucks game change and complete the SRS.
There was much discussion on the game delays.
Director Wisler cited the New Hampshire contract with Scientific Games in which it states “…that the contractor shall modify existing games or install additional games within the time frame authorized by the executive director.” Director Wisler suggested each state refer to their Scientific Games contract regarding such.
OPERATIONS COMMITTEE – Rich Sperlazzi
The Operations Committee has basically been working jointly with the Development Committee on the SRS.
As mentioned on a recent committee conference call, we are all going to be working on an SRS for Powerball and it is felt that, as a group and sister states, we should all share any information we find out in Powerball as it may adversely affect Tri-State. We want to keep the lines of communication open amongst the three states.
SCIENTIFIC GAMES – Liz Dimmick
Nothing to report at this time.
ACCEPTANCE OF REPORTS
A motion was made by Commissioner McPherson to accept the reports as given. Motion was seconded and voted in the affirmative.
OTHER BUSINESS
Proposed revision to Policy No. 3: Standing Committees with the Tri-State Commission.
Tri-State shall have five standing committees: Marketing, Development, Draw, Finance, and Operations. Each committee will be appointed annually by the directors at the Commission’s July meeting., with the Development Committee membership consisting of the chairpersons from the Marketing, Finance, and Operations committees. With the exception of the Development Committee, whose chairperson shall be from the state of the current Tri-State Commission Chairperson, each of the other committees shall select its own chairperson from its membership.
*See Tri-State minutes dated July 15, 2005 for description and duties of the Development Committee.
MOTION
A motion was made by Commissioner McPherson to accept the revision to Policy No. 3 as stated. Motion was seconded and voted in the affirmative.
Committee appointments:
Marketing Committee:
Hadley Melendy, Vermont Lottery Commission
Lisa Rodrigue, Maine State Lottery
Maura McCann, New Hampshire Lottery Commission
Finance Committee:
Mary Cassani, Vermont Lottery Commission
Denise Garland, Maine State Lottery
Kassie Strong, New Hampshire Lottery Commission
Operations Committee:
Sylvia Buzzell, Vermont Lottery Commission
Rich Sperlazzi, Maine State Lottery
Robert Preston, New Hampshire Lottery Commission
Development Committee:
Hadley Melendy, Vermont Lottery Commission
Rich Sperlazzi, Maine State Lottery
Maura McCann, New Hampshire Lottery Commission
Draw Committee:
Maura McCann, New Hampshire Lottery Commission
MOTION
A motion was made by Commissioner McPherson to accept the slate of committee appointments as presented. Motion was seconded and voted in the affirmative.
Commissioner Scala expressed thanks to Maura for all her hard work as well as the other committee members.
The next regular commission meeting is scheduled for August 1, 2008 at 10:30 a.m. at the New Hampshire Lottery Commission.
There was a motion to adjourn.
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Thomas Scala, Chair