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Foreign companies drop bids to run Indiana lottery

Associated Press
September 6, 2012
Keywords
Arts & Entertainment, etc., Gambling, Government, Government & Economic Development, Hoosier Lottery, State Government
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Two foreign companies have dropped out of the bidding to become the first private manager of Indiana's lottery, with one charging the state's process encourages bidders to set expected revenue levels too high.

Camelot Global Services, which runs the national lottery in the United Kingdom, and Tatts Group Ltd., which operates several lottery licenses in Australia, were among four companies that submitted information to Hoosier Lottery officials for background checks in anticipation of submitting private management proposals.

Camelot officials decided last month to not pursue the contract, saying the Indiana process won't allow the operator to maximize returns in a responsible way, company spokeswoman Laura Pearson told The Indianapolis Star for a story Thursday.

Pearson said the proposed agreement "strongly incentivizes all bidders to propose artificially high income targets" and does not adequately protect the state if the winning company fails to achieve those projections.

Hoosier Lottery spokesman Al Larsen said the agency disagreed with Camelot's assessment.

"We are aware of Camelot's decision," Larsen said. "We understand they are unwilling to meet our high expectations and respectfully disagree with their conclusions."

Tatts spokesman Michael Mangos said his firm dropped out because "the final model did not work for us."

Lottery officials have declined to release information about formal proposals from bidders that were due last week.

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

Indiana officials announced in July that they would seek a 10-year contract for lottery marketing, sales and distribution services. The state's lottery commission expects to choose a winner by Sept. 26 and sign a contract by Nov. 1.

Pearson said Camelot officials also believed the state's bidding process favored companies already working for the Hoosier Lottery.

The two remaining competitors that submitted to initial background checks currently do business with the lottery. Rhode Island-based Gtech supplies and maintains instant ticket and vending machines, and New York-based Scientific Games provides the lottery's central online system and terminals.

Illinois last year became the first state to agree to a private lottery management contract. New Jersey and Pennsylvania are considering doing so as well.

Northstar Lottery Group, a partnership between Gtech and Scientific Games, beat out Camelot for the Illinois contract, in part because Northstar promised more money for the state.

In its first year, the firm brought in record revenue but fell well short of the $825 million it promised to Illinois officials. The company and the state are in arbitration over the issue.

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  • Demographic
    BillZSeptember 7, 2012 2:51 PM
    A few play the lottery for fun and realize the odds. Lotteries have always been "the poor man's tax".
    Reply to CommentFlag Comment
  • Valid points
    JerrySeptember 7, 2012 2:09 PM
    I do know this, Indiana seems to run as responsible of a lottery as one could hope. Whether you are a gambling proponent or not it is a pretty balanced approach showing sensitivity to addiction etc.To squeeze more out of the lottery, more than likely will mean leaving behind that balance and putting greed far out in front of the citizens of this state's well being.
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  • GTECH from Italy
    JerrySeptember 7, 2012 2:03 PM
    I thought GTECH was technically from Italy. Interesting when we need jobs in Indiana and the U.S., we look to outsource jobs out of the state which ultimately feed the Italian economy. I also read that the Hoosier Lottery was on track to deliver $212 million back to the state this year. 12-13% more in an economy that is still on its heels. Pretty good improvement I'd say. Good job Hoosier Lottery!
    Reply to CommentFlag Comment
  • Why Would the State Encourage Gambling?
    NatachaSeptember 6, 2012 5:53 PM
    Gambling used to be illegal. Then the State saw an "revenue opportunity", and legalized it, but only if it benefitted the state. Next, the economy turns south, and now the State wants privateers to improve on the $188 million yearly income because, somehow, this isn't enough gambling. The only way to improve on these numbers is to encourage more people to gamble or to encourage those who already gamble to gamble even more. Isn't the reason gambling was illegal in the first place because some people can become addicted to gambling, most gamblers are lower income and it diverts money from their families, and overall, the gambler ultimately loses? Why should the State of Indiana encourage this?
    Reply to CommentFlag Comment

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    1. liek the rest of America

    2. These quaint,obsessed musings by the stalkers are certainly entertaining, but I'm trying to figure out what, if anything, all the yelping below has to do with Zak Brown.

    3. It's evident that Moffett was pushing the right buttons and corporate America is now trying to squash him. He just wanted to withdraw the free pilot services provided to the company by the pilots to try and put some pressure on a company that has not been interested in negotiating a contract in over 5 years. The company does not provide a contract because not having one has saved them a bundle of money. Shame on any Republic pilots not standing behind their union leader just because things are getting tough, can you not see such strategic moves by the company as putting the last union president in a corporate position and into THEIR pocket. Do you really believe the last union president is so appalled at the attempts by Moffett, do you not remember his oppositions to the company? We stood behind him. It has been proven over and over again for thousands of years without fail, a man cannot serve two masters. Anyone that believes people vote contrary to their paycheck and livelihood deserve to be taken advantage of, the recent statements by the former union president are laughable as he denounces the current union president from his new corporate position. Have you ever seen a drafted sports player score points for his previous team, it cannot be done, he is not on the pilots side anymore, he gets his money a different way now than you and I do, and he should not be allowed to remain on the seniority list. A drafted player brings strength, credibility, tactical knowledge, and a strategic advantage to his NEW team, he would not be drafted or paid were it otherwise. We are all forced to choose only one side to play for and support, not doing so has many references in life such as insider trading and shaving points, all illegal for good reason. This basic fact is why corporate moguls, scientist, and engineers all sign non-discloser agreements and non-compete clauses, as protection in case they are lured into switching sides as our former union president has done. No NFL coach ever drafted a player so that both teams could benefit and better understand each other, they are recruited to win the game against that former team, period. Likewise the company does not recruit the former union president by accident or mutual understanding, its strategy. Don't confuse playing the game with good sportsman-like conduct in support of common business and prosperity goals, with the requirement to only play for one side. Good men we all love and favor fall subject to this manipulation, often without their knowledge, and it is not a betrayal of their friendship to oppose them when they switch sides. If we did not love and trust them, they would not have been chosen and lured to the other side in the first place. The deception by the drafted player is not made at a conscious level, it's just human nature and it's all about money and power which corrupts our ability to be objective and loyal to two masters. This is why our court system created the defense attorney, and why our military created counter intelligence. Its strategy and its propaganda, and it works, and that's why the "powers to be" manipulate the chess pieces by sometimes changing their colors. Some players know they are being manipulated when their color is changed, but it brings them more money and power so they do not care. The rest have good intentions but do not even realize they are being manipulated. This tactic is also known by another name, Divide and Conquer. In battle sending an imperfect message with an imperfect team is obviously not ideal, but it's still being sent by YOUR team, your union leader, a leader that has common goals and common rewards with you, they are the best, because we have elected them to do a job for us. If you are not backing Moffett but believing the spin by those that have recently switched sides, you are taking food out of your own mouth. Showing unity and backing an imperfect situation still results in taking just as much ground, it's about unity and bargaining power. It's not necessary to wait around for that perfect attack because it will never come, the company will spin and attempt to destroy anyone that gets in their way. Ultimately it's not about any specific attack anyway, ASAP or whatever it makes no difference, it is and always has been only about power. If this company cared about safety it would not build pairings with 8 hour overnights, come on, are you that naive? Besides, do you really think Hoffa cares, no, he got a call from corporate America and was squeezed into denouncing Moffett. If he didn't they would spin the safety card against him and the Teamsters National with implication for truckers, future contracts, insurance rates etc...saying something like the Teamsters use safety as a bargaining chip, blah blah blah... Do you really think any pilot is going to do something unsafe for the contract, absolutely not, the only ones threatening safety here is the company with reduced rest, fatigue, and poverty. Do you not find it odd that Hoffa and the Teamsters are opposing a Teamster president publicly? Would the Teamsters National not normally support and work with one of their own? Why did they not sit down and help him strategize, correct any mistakes, and charge ahead? Would the Teamsters National not normally support and leverage a contract for all those pilots that have been paying Teamster dues, isn't that why we have all been paying Teamster dues in the first place? I sure haven't been paying dues so that the Teamsters National could come along and write this kind of an article undercutting our union leader and our unity. Whose side is the Teamsters National really on, it's obviously not the Republic pilots side.

    4. No matter what Moffatt does the company is going to spin it like he is the terrorist and brainwash people like you into believing it, wake up, back your players that are trying to change things for you and your livelihood. Where has Hoffa been for the last 6 years, except collecting our dues. Seriously, do you really think an FO going for upgrade, signed off by a checkairman ready for the upgrade, who then fails, is not even capable of returning as a First Officer.

    5. whoa!

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