From the Arkansas Statehouse...

Legislature debuts lottery bill.

In Lottery on 18 February 2009 at 8:31 pm

In a two-hour meeting this afternoon, a conference of legislators introduced long-awaited draft legislation detailing how the new state lottery will work.

Several of the provisions have been in circulation already. The lottery will be implemented and administered by a nine-member commission appointed by the governor, speaker of the house and senate president pro tem.  The commission is essentially an independent state agency. In theory at least, neither legislators nor the governor will have any control over which companies get the big business of running the lottery beyond appointments to the commission.

Commissioners will be unpaid. The only paid employees of the commission are expected to be a director and a procurement official that advises female- and minority-owned firms about acquiring lottery business. The commission will appoint both employees.

Less expected were the tough ethics standards in the bill, which Speaker of the House Rep. Robbie Wills said will make the Arkansas lottery the most ethically stringent in the country.  Members or employees who leave the lottery commission will be banned from lobbying the commission on behalf of a lottery vendor or retailer for two years. Lottery vendors will not be able to give any gifts whatsoever to members of the lottery commission, and they will be prohibited from making political contributions to public officials. They will be barred from so much as buying a lottery ticket.

The bill explicitly opens the lottery to scrutiny under the Freedom of Information Act. It includes a exemption for certain information given to the U.S. Government or law enforcement agencies under special agreement.

Government oversight of the lottery is expected to be comprehensive as well. Besides an annual review by the Division of Legislative Audit, the bill establishes a special lottery oversight committee that will consist of five senators and five House members.

Lieutenant Governor Bill Halter, who ran the lottery amendment campaign last fall, said he was pleased to see that so many of his ethics recommendations made it into the draft legislation. In fact, he said legislators may have tried to make requirements too strict in one regard. A provision of the bill would ban any vendor from operating in the state if an elected official or constitutional officer owns even one share of the vendor’s stock. Halter envisioned a situation in which a legislator against a particular lottery company buys a share of its stock so as to eliminate it from state consideration.

The draft bill, which is fifty pages, does not yet contain information about how the lottery will fund college scholarships. That section of the legislation is not to be revealed until next week.

For now the bill has plenty of provisions for statehouse watchers to digest. Read after the jump for more details.

Games: The lottery commission will determine which kind of games will be played, though certain games are prohibited. Video lottery is banned, as is casino gambling. The bill allows the commission to establish participation in multi-state games such as Powerball.

Retailers: The commission will establish a network of stores that will sell lottery tickets. It is currently unclear what kind of stores will be allowed. (One legislator expressed concern that churches might be able to sell tickets.) Retailers must receive a fee of at least five percent of ticket sales, though the lottery board can give them more. Retailers will be represented to the lottery commission by a Lottery Retailer Advisory Board.

Prizes: The commission decides the amount of lottery proceeds to be given in prizes. There is no requirement that it provide a certain rate of return to the state. Currently the law states that no more that $200,000 in unclaimed prizes be used for treatment of gambling addiction, though Wills indicated that he might change the bill to require at least $200,000 be spent. Anyone who wins over $500 in the lottery and who also owes taxes, child support or fines will only receive his prize after those debts are paid.

Procurement contracts: The lottery commission is authorized to solicit bids for contracts of $75,000 or more. It is to accept a bid that it deems to be in the best interest of the lottery. It need not take the highest bid.

Legal: People under 18 cannot win lottery prizes. Anyone suing the lottery has to go through the Arkansas Claims Commission. Appeals of lottery commission decisions will be made to Pulaski County Circuit Court.

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