By John Lyon
Arkansas News Bureau
LITTLE ROCK — The Arkansas Lottery Commission voted Wednesday to award the lottery’s banking contract to Bank of the Ozarks, pending legislative review.
The Little Rock-based bank was the only one of six bidders that offered to handled the lottery’s banking business for free. The others proposed charging monthly fees ranging from $1,500 to $4,000, Lottery Procurement Director Bishop Woosley told the commission Wednesday.
A Bank of the Ozarks executive said in an interview that handling the lottery’s account — some have estimated the lottery will generate $400 million a year — would be profitable enough without fees.
“We determined that we would be able to earn a fair profit based on the investment of those scholarship dollars for the period of time that they would remain in our bank,” said Executive Vice President Susan Blair.
The absence of fees will mean “more money for scholarships,” Lottery Director Ernie Passailaigue said.
The banks whose bids were not selected were Bancorp South of Tupelo, Miss.; Charlotte, N.C.-based Bank of America; Centennial Bank of Little Rock; Regions Bank of Birmingham, Ala.; and Minneapolis-based U.S. Bank.
The commission’s chairman, Ray Thornton of Little Rock, and members Mike Malone of Fayetteville and Derrick Smith of Little Rock abstained from voting on the contract because of personal connections to Bank of the Ozarks.
Shanta Arnold, a licensing specialist for the lottery, is married to a member of Bank of the Ozarks’ board of directors, but she did not participate in evaluating the bids, Woosley said.
Also Wednesday, Passailaigue said the lottery’s instant-win games are scheduled to start Sept. 28 with one $1 ticket, two $2 tickets and one $5 ticket. Sale of Powerball tickets is tentatively set to begin Oct. 31, he said.
The commission also voted to issue a notice of intent to award a contract for quality assurance testing to Batelle of Columbus, Ohio. Batelle was one of three companies that sought the contract; the other two were Gaming Laboratories International of Lakewood, N.J., and White Sand Consulting of Las Vegas.
Batelle has proposed that its employees be paid hourly wages ranging from $180 to $275, Woosley said.
David Barden, the lottery’s vice president of gaming, said the National Council on Problem Gambling has agreed to let the lottery use its national hotline for problem gamblers until Arkansas develops its own program.
The legislation setting up the lottery requires at least $200,000 from unclaimed prize money to be used annually for treatment of gambling addicts and education about compulsive gambling disorder. The law directs the money to the Department of Health, but lottery officials have said the money likely will be transferred to the Department of Human Services.
DHS currently has no program for gambling addiction. Passailaigue said the lottery will provide DHS with borrowed money until unclaimed prize money starts accumulating.
The Legislature has approved a $6 million loan to the lottery to cover start-up costs, to be repaid through lottery revenue.
