Tri-State Lotto Commission
September 7, 2007
Meeting Minutes:
TRI-STATE LOTTO COMMISSION
SEBASCO RESORT
SEBASCO RESORT ESTATES, MAINE
September 7, 2007, 9:00 a.m.
Present: Richard Campbell, New Hampshire Lottery Commission
Thomas Scala, Vermont Lottery Commission
Orland McPherson, Maine State Lottery
Rick Wisler, New Hampshire Lottery Commission
Alan Yandow, Vermont Lottery (via teleconference)
Dan Gwadosky, Maine State Lottery
Maura McCann, New Hampshire Lottery Commission
Kassie Strong, New Hampshire Lottery Commission (via
teleconference)
Mary Cassani, Vermont Lottery Commission
Hadley Melendy, Vermont Lottery Commission
Carole Lacasse, Vermont Lottery Commission
Rich Sperlazzi, Maine State Lottery
Lisa Rodrigue, Maine State Lottery
Denise Garland, Maine State Lottery-Finance
Karl Fortman, Scientific Games
Darrell Frecker, Scientific Games
Moe Pepin, Scientific Games
Liz Dimmick, Scientific Games
Doug Parker, Scientific Games
Mary Wdowin, Scientific Games
Leslie Badger, Scientific Games
Chris Nichols, NL Partners
Jennifer Cartmell, NL Partners
John Ripley, NL Partners
Russ Leonard, NL Partners
Jeff Walla, Berry, Dunn, McNeil and Parker
The meeting was called to order at 9:05 am by Chair Campbell.
ACCEPTANCE OF THE AUGUST 3, 2007 MINUTES
A motion was made by Commissioner McPherson to accept the August 3, 2007 minutes as distributed. Motion was seconded and voted in the affirmative.
AUDIT PRESENTATION BY JEFF WALLA, BERRY, DUNN, MCNEIL AND PARKER
Mr. Walla commented that this was their third year of performing the audit for Tri-State and he pointed out a couple highlights in the financial statements. They issued an unqualified opinion on the financial statements. The management discussion and analysis had a couple highlights noted by Mr. Walla. The gross revenues for the lottery increased by about $10 million this year; there was a decrease in Megabucks, the Pick 3 and Pick 4 games. The Triple Play game ended January, 2007 and was replaced with the Paycheck game that had sales of about $5.4 million. The Lottery was able to return to the states an additional $2.2 million this year for a total of $23 million overall.
Mr. Walla distributed and reviewed the SAS 61 Communications as required. There were no material misstatements or weaknesses in the internal controls. There were no difficulties encountered in dealing with management or staff while conducting the audit. There was one reclassification of interest related to the short-term portion of the annuities totaling $7.6 million. The reclass impacts the balance sheet only and had no impact on the operation of Tri-State.
There was noted in the Management Letter instances of Agent files, one in Vermont and six in Maine, missing evaluation forms and one instance in Maine of a missing on-line agreement. These documents required to be on the file under the existing policies and procedures of the Commission. Mr. Walla recommended that to eliminate this comment in future years, each state go through their agent files and replace any missing documentation.
FINANCE COMMITTEE - Mary Cassani
Gross revenues for Tri-State for July 2007 have increased $94,915, or 1.57% compared to last year. Of this increase, Megabucks sales are up in all three states $470,630, or 16.32%; Daily Numbers sales are down $458,898, or 20.05%; Paycheck sales are up over Triple Play sales from last year $309,539, or 70.16% and the Promotional Fast Play games are down $226,356, or 54.91% from last year.
Total Expenses this year to date are down from last year $17,997. This represents an increase in cost of sales of $37,031, and a decrease in operating expenses of $55,028.
Net Profit for July 2008 increased from last July $94,068, 28.78%.
The Paycheck Guaranteed Contingency Fund is currently short $90,000. All other contingency funds are in the positive. Expired unclaimed prizes are over $1.4 million.
The Finance Committee met yesterday. It was decided that since our negotiations with our choice for legal counsel fell through and the other bidder was too expensive, we will broaden the scope of our outreach of the RFP to include newspapers and, if possible, the Vermont Bar Association.
We discussed the possibility of going out to bid for banking services. The last time we did this was December 1001. The State of Vermont Treasurer's Office will be going out to bid soon and we decided to wait and see the results of their RFP. Also, the Chittenden Bank has been sold and we will see what effect that sale may have on their services. We will not prepare an RFP at this time.
There was a discussion about all three states closing their books for FY08 on June 30,2008, accruing sales through that date. It was agreed that Tri-State will follow suit, eliminating the reconciling at fiscal year end.
The committee met yesterday. A decision was made to go out again with an RFP for legal services.
The committee also discussed the possibility of going out again for banking services. A decision was made to put a hold on the RFP at this time.
MARKETING COMMITTEE - Maura McCann
The press clip was distributed. Maura did check into receiving the press clips on line; however, the company charges sixty cents more per clip. A decision was made to stay with the hard copy version.
Maura shared New Hampshire's point-of-sale for the Raffle game.
DEVELOPMENT COMMITTEE - Maura McCann
The committee has met three times since the last Commission meeting. They've been going over the Fast Play game, Lucky Numbers, which was launched August 13th. Maine has been averaging about $45,000 a week; New Hampshire $33,000 and Vermont about $20,000.
The committee is finalizing some games, i.e. Spin to Win, Double Header, Cash Vault and Cash Cube.
The committee is waiting for prize structures. Maine and Vermont will get them in the next download and New Hampshire will get the download in the Spring, of 2008.
The committee is working on a Paycheck Survey. Each state will distribute the survey in their state. This information may be useful in dealing with the Megabucks game as well and any future games we offer.
Consideration for a trademark search process for the various Fast Play games will have to be considered.
The Holiday Bonus promotion is being discussed with no decisions made at this time.
MOTION
A motion was made by Commissioner Scala to accept the Fast Play rules and noted a "date of birth" will be added to the claim form. Motion was seconded and voted in the affirmative.
DRAW COMMITTEE - Maura McCann
Nothing to report at this time.
OPERATIONS COMMITTEE - Rich Sperlazzi
The committee met August 1st via teleconference and have another meeting scheduled for Monday, September 10th.
The Tri-State Development Cycle Flow Chart has been completed and approved. The SRS Template has yet to be completed.
SCIENTIFIC GAMES - Liz Dimmick
Nothing to report at this time.
ACCEPTANCE OF COMMITTEE REPORTS
A motion was made by Commissioner Scala to accept the committee reports as presented. Motion was seconded and voted in the affirmative.
OTHER BUSINESS
Alan wanted to echo Maura's comments on the Development Committee in their interest and ability to work and meet many times during the course of a month to deal with all the issues that have come before the Development Committee and Maura, as chair, has moved them along very well. A big thank you to Maura and the other committee members for their diligence and the work they have been doing.
MOTION
A motion was made to move into executive session at 9:38 am for the discussion of a contract issue. Motion was seconded and voted in the affirmative.
MOTION
A motion was made to move out of executive session at 9:50 am. Motion was seconded and voted in the affirmative.
MOTION
A motion was made by Commissioner Campbell to select Battelle as sole source for consulting services. Motion was seconded, vote affirmative 2, and 1 no. Motion did not pass.
Director Wisler and Maura McCann will put together the consulting services RFP.
The next commission meeting is scheduled for Friday, October 12, 2007, at 10:30 a.m. at the New Hampshire Lottery Commission, in Concord, NH.
A motion was made to adjourn at 10:00 a.m.