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Director: Bidders must meet Indiana lottery standards

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Indiana won't turn its lottery over to a private company if bidders don't meet the state's high standards, the executive director of the Hoosier Lottery said Friday.

The state has been seeking bids on a 10-year contract to run the Hoosier Lottery. Executive Director Karl Browning released a statement Friday, a day after a spokeswoman for Camelot Global Services, which runs the national lottery in Great Britain, said it dropped out because the state's process encourages bidders to set expected revenue too high. Tatts Group Ltd., which operates several lotteries in Australia, also dropped out.

They were among four companies that submitted information to Hoosier Lottery officials for background checks in anticipation of submitting private management proposals. The other two companies that applied for initial background checks were Rhode Island-based Gtech, which supplies and maintains instant ticket and vending machines in Indiana, and New York-based Scientific Games, which provides the lottery's central online system and terminals.

Browning said officials won't release any information about the proposals until a Sept. 26 lottery commission meeting, when a contract might be awarded.

"If proposals meet our high standards and can significantly increase the lottery's annual income, we will consider moving forward; if they don't, we won't award a contract," he said in the statement.

The state received $188 million in lottery proceeds last year. State lottery officials and Gov. Mitch Daniels are hoping a private firm can boost lottery revenue.

"We have an obligation to test the market to determine if the private sector can bring more value to the lottery operation," Browning said.

Indiana officials announced in July that they would seek a 10-year contract for lottery marketing, sales and distribution services.

Illinois last year became the first state to agree to a private lottery management contract. That contract was awarded to Northstar Lottery Group, a partnership between Gtech and Scientific Games. Northstar brought in record revenue in its first year, but fell well short of the $825 million it promised Illinois officials. The company and the state are in arbitration over the issue.

New Jersey and Pennsylvania also are considering switching to privately managed lotteries.

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