ALC-Lottery Oversight Subcommittee
Video
Transcript
14 documents
Machine transcript
May contain errors. Verify important quotations against the official video.
About transcript accuracy
- Source
- Whisper
- Model
- ggml-large-v3-turbo.bin RTX5060
- Processing date
- October 7, 2026
Unknown speaker
0:00
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Thank you.
Good afternoon, good afternoon friends and colleagues and thanks to the House members
for having so many people here wonderful and if the senators if I can
have your attention we're gonna go ahead and get started you don't have to pay attention to me just kind of lower your voices a little bit no big deal all right so welcome
everybody we have members we have several reports today and if I've looked at this right I think there's maybe only one thing
we have to vote on, but we have several reports. And Bishop, I see you're your eager self, so please have a seat and regale us with all your knowledge. All right, so do we
have any minutes? We don't have
any minutes. We need to. Okay. All right. So this is item C, the update on what's been
going on, the operations and so forth. You're recognize
Mr. Woosley. Good afternoon, Bishop Woosley with the lottery.
Speaker 11
7:23
I'm the director if you didn't know who I was. The first thing is our comparative income statements, which basically
Speaker 14
7:31
show where we are versus last year, where we are versus last month last year, and where we are
versus budget for the
Speaker 15
7:40
year. Let's see. So your first slide is the comparative income statement for November of 2019 versus November of 2018. As you can see, with instant ticket games, we finished down about 2.7% or about $828,000, and draw games about $750,000, which for a grand total of revenues is about $1.5 to $1.6 million down versus last year.
Speaker 14
8:10
If you read the article that we generally get on the 10th of every month after we put our reports. I explained a little bit about what happens after you have a large jackpot. In October of last year, we had a $1.5 billion MegaMeans jackpot, and at the very same time, a $750 million Powerball jackpot, which for those of you who don't pay much attention to the lottery industry, that's never happened. You're lucky if you have one, much less two going at the same time when you have that you have a lot of footfall in the store over
the course of two or three weeks we sold about 22 million dollars worth of mega millions or powerball in about a two to three week period when those jackpot gets hit which i believe these were hit in the latter part of october you start having those players come back in the store and cash their tickets and so you have this halo effect to where even after the jackpot gets hit people are coming in and they're cashing their tickets and if it's powerball or mega means they may have won two or three dollars or ten dollars and a lot of them are saying you know what just give me another
ticket or give me an instant ticket or something along those lines so two or three weeks afterwards we see this halo effect and i that that is the primary reason why we kind of lost the battle this past month the last two weeks of the month were very strong and we're very strong so far this month so i attribute a little bit of this just to the simple fact that all you heard about was lottery for about a month with the powerball and the mega means jackpot last year and then those people started kind of stumbling into the stores after and said hey i remember i got this powerball ticket that i won can i cash it and hey give me a two dollar ticket so not to be expected
It doesn't make me happy, but
Speaker 15
9:55
it's kind of what happens in the industry. From a budget standpoint, again, finished about $694,000 versus instant where we anticipated we would be, and about one, two in draw games. Again,
Speaker 14
10:08
if you read the article, you'll see this here in a minute. From a national standpoint, both Mega Millions and Powerball are down this year. Part of that has to do with the jackpot growth. interest rates when they go down generally I guess good for the housing
industry and things of that nature but for the lottery industry it is not good the reason being when we have a jackpot run that money that goes into sales is placed into either the mega millions account or the Powerball account and so you have millions upon millions of millions of dollars sitting in those accounts for weeks at a time and when interest rates are high that money builds and that increases the jackpot when you don't have interest rates growing or you don't have high interest rates what you see is that money sits
there and doesn't accrue any interest over that time and we can't build the jackpots accordingly so I was talking to Mr. Wickline before the meeting right now we have about a 380 million dollar mega millions jackpot I don't know the exact role sequence but let's say that right now if this jackpot took 18 rolls to get where it is right now last year it would have taken 15 rolls because it would grow faster because of interest rates and that's problematic for us because they're growing slower and we just
haven't had a lot of luck they're getting hit a lot more frequently so from a multi-state standpoint all states are suffering i know that i say this almost every every meeting but we're an 80 percent instant state and there's probably never been a better time to be an 80 percent instant state because the multi-state games are not selling at that
Speaker 15
11:46
high of a rate. So if there's ever been an advantage to being an 80% instant state, it's now. But that's kind of an explanation of where draw games are from a national standpoint.
The multi-state groups, which I'm a member of, are sitting down right now and probably going to vote in March as to some type of change we might make to the game to make it grow faster or make it a more relevant game for our players. don't know what that'll be but maybe by the next time we have a meeting I'll have a better idea of what it may be from a proceed standpoint anytime you're down especially in draw games worse you anticipated you're going to have less proceeds because we just simply make more money off of those games the return
is much better so from that standpoint we finished about 300,000 down versus where we anticipated. So this is our physical year so far versus last fiscal year and there's good
Speaker 14
12:41
and there's bad but the good I think is partly because of what we do the bad is something we just don't really control. If you see the top line instant ticket games we're up about eight 1.8 million dollars versus last year in instant tickets. If there's anything that we do control
it is our instant tickets we design those we market those we put them out we put out 48 to 50 a year we control that so from the standpoint of something that we control we're actually doing better than last year and why is that important well last year was an instant ticket record year and you'll see in another slide here in a minute we're doing better than the previous year which was in the record year we've had two consecutive record instant year so the fact that we're doing well and actually beating last year is a good thing and i think it's a sign of the health of
the lottery the second line there where you see 21 million that is
Speaker 15
13:35
the difference in the two mega millions jackpots or the mega millions in the powerball jackpot last year and where we are this year so there's our down for the year now we have jackpots going right now and it's possible they may not
Speaker 14
13:50
hit for another few weeks and we may suddenly be completely healthy and having no read on our reports at all but it's the luck
Speaker 15
13:56
of the draw and we'll see if these continue uh but that being said uh with that 19 million down and that 19 million being almost all uh or
Speaker 14
14:06
really being all draw games and you make about 40 cents out of the dollar off those draw games you look down at the bottom and your net proceeds are about 8 million less than they were last year at this same time uh at last year but last year we were on a record pace and we ended up selling 90 or making 98
Speaker 15
14:26
million dollars off of power bar sales last year so again to be expected actual versus budget again the draw games we're actually above budget on instant ticket games
we're below budget on draw games as i said they just have not performed at all this year hopefully this current
Speaker 14
14:44
run will get us back to even from that standpoint so from a net proceeds standpoint without unclaimed prizes we're about four million down for the year
Speaker 15
14:52
that translates a little bit less in the next slide but again not having the end or the draw game selling like we hope they will hurt you and we've had the
Speaker 14
15:02
luck of the draw for the last two years because they've been crazy but the cyclical and it comes and goes but you hope it doesn't all happen at once so
maybe this latest run will help us some
Speaker 15
15:14
hopefully they'll last a little while we're in a good place from a standpoint of timing uh if we get past the first of year and those two jack pots are still going that's when our sales really ramp up january february march and april so maybe that'll be a good thing our transfer analysis so far as you saw on the last slide uh we were down about four million versus where we're where we anticipated in proceeds uh however when you add unclaimed prizes into that we're only down about two million and may sound like a lot of money but from a month
or two standpoint you can make that up fairly quickly if you have a jackpot run so our budget was 89.6 million dollars for this year we're about 1.9 under that from a trend standpoint hopefully we'll catch up to that in the next month or two i would say with the instant tickets as they are right now i think we're in pretty good shape for the fiscal year i wanted to kind of give you some comparative analysis for where we are versus the two last two
years at the same time so our last two years have been record instant ticket sales years and as you can see for FY 20 versus FY 18 and 19 at the very same time we're actually up about two million
Speaker 14
16:34
dollars versus last year and about a little over two million dollars versus last year so or the year before last so from a record standing record year standpoint we're doing very well if you look
Speaker 15
16:47
at our price points price point being the actual price of each ticket
we're up in 20s we're up in tens versus last year and up in fives those are our most popular tickets so from that standpoint we're doing very well again here's the bad so this is our total draw sales which is about 30.7 million dollars this year versus last year at the same time which was about 52 that's a pretty significant difference and obviously those two jackpots are the reason for that but you can see also that FY 18 we had very good luck with
jackpots and we're again down from that from the Powerball and Mega Means perspective those are really the only two games that were down versus last year and the year before. The rest of our games
Speaker 14
17:36
are actually doing pretty well, so our draw games are healthy other than those two games. Unfortunately, those two games are the kind of games that make up the most of what we sell. So hopefully any changes that can be made will help, and maybe we'll get some jackpots that'll last, and we can start building back on that. But competing against last year, best year the lottery ever had, is going to be difficult. So I kind of want to give
you some perspective as to what we do control and how well
Speaker 15
18:04
we're doing with that. All right, that is the end of my first
presentation. I think I have a few today. Yeah, you do. Does anybody
have a question of Mr. Woosley? I've got one over here. I've got Senator Hickey first. And who was somebody
Senator Jimmy Hickey, Jr
Unverified
18:18
up here? That's one. Okay. All right. Yes, Mr. Woosley, would you mind just
kind of narrowing this down a little bit? Under the marketing and advertising, are we exceeding our yearly budget
Speaker 11
18:30
on that? no sir that that uh differs based on what's going on in that particular month so we've had this
Speaker 15
18:39
mega millions jackpot this month we didn't have any jackpots last month because they all got
Speaker 19
18:44
hit at the end of october so you're pouring a little bit more money into this month
Senator Jimmy Hickey, Jr
Unverified
18:52
than you did same time last year
okay whenever i look at the the one called comparative income statements year to
Speaker 11
19:04
date November 30th, actual versus budget. Yes, sir. Are you
Senator Jimmy Hickey, Jr
Unverified
19:07
talking about the $63,883? No, sir. I'm talking about the $156,649 that's in parentheses.
Senator, what page are you on? Sorry, on the wrong one. Okay. Our budget is just... It doesn't have a page number. It's just titled comparative income
Speaker 15
19:24
statement. Okay, I see it. Okay. Actual versus... Our budget, for an advertising standpoint, is just annualized. You try and stay as close to you can on that monthly basis, but if you have jackpots or other situations pop up, you may exceed or go below that. It all
Speaker 30
19:35
evens out at the end of the year when we don't exceed our budget. Okay. We track it down to the very end. Yes, sir. Thank you.
Speaker 54
19:42
Is that it, Senator Hickey? Representative Payton. Thank you, Madam Chair. And Mr. Woosley, Senator Hickey asked my question, basically. So for a little more clarification, when it says year-to-date, is that July 1st? Is your fiscal year July through June? Yes, sir. We're the same as the state. Okay. And so you're showing a $3.4 million spend and a $3.2.5 was your budget for those five months.
Yes, sir. So it's not just a one-month comparison here. We're talking about five
Speaker 11
20:20
months out of the year. We have to report to you
Speaker 14
20:24
from a monthly standpoint. We estimate and we basically annualize our marketing budget over 12 months because if a, for instance, if a $1.5 billion jackpot comes along, you're going to turn much more advertising on for two weeks than you would normally. So any given month, it's going to vary. So if I say my budget's $8 million, you divide that over by 12 months,
And if it's $450,000 a month, but you have a jackpot that comes along, it'll probably be $480,000 or maybe $500,000, whereas the next month, there's nothing to advertise from that standpoint. So,
Speaker 54
21:00
and I think I understand that. Fine. Can you tell me what is your annual advertising
Speaker 52
21:05
budget? It's $8 million. Thank you. Thank you, Madam
Chair. All right. Thank you. Senator Hickey? I
Senator Jimmy Hickey, Jr
Unverified
21:11
want to make sure then, based on what you just said, Bishop, that on your comparative of income statements between November 19 and November of 18, based on what you said there,
why are we so much more than 19? Because we're showing that we spent $701,000 compared to $499,000.
Speaker 15
21:35
We may have had more big instant ticket launches this year than we did the same time last year. it varies month to month there is no you you monitor it on a
Speaker 14
21:45
monthly basis you try and hit set a budget however depending on the timing of your launch for instance we may have had two
Speaker 15
21:52
launches in one month because you have a labor day holiday to where your normal your
normal your normal instant launch is the first tuesday of every month generally but say on a Labor Day, we launch two in August because you don't want to run into the Labor Day weekend where you don't have UPS, you don't have people available. So you may have two instant launches, but the budget goes into one month. Does that make sense? It varies based on timing. But at the end of the year, it's still going to be $8
Senator Jimmy Hickey, Jr
Unverified
22:22
million. Okay. So since you are annualizing it, you can reign that in in these later months if you need to,
and you can keep it where it needs to be.
Speaker 15
22:33
Yeah, we manage it on a monthly basis, but once you hit about January, we start trying to focus in and say, all right,
Speaker 30
22:39
this is how much we have left, this is how much we can dedicate, but we do not exceed that budget,
Senator Jimmy Hickey, Jr
Unverified
22:47
no, sir. Okay. It just seems a little odd whenever you compare the November of that one to this one that we would
have been that much difference, but thank you. Yes, sir. Thank you. Mr. Woosley, is there a procedure on the outside chance that you, say, might have had need to spend more in three or four months and you come to the end of the fiscal year, and there is some reason for you to need more funding in that budget?
Is it just cut off, period, that's it, or is there a process for you coming to us or to legislative council? it
Speaker 30
23:23
would just be zero we would come back to whatever let's assume we you're in session i guess we go to pier okay whoever it is that we would go to
Speaker 14
23:35
and say hey we're close to our budget yeah there's a huge
jackpot we need to advertise okay yeah that would be pure uh but uh senator hammer and i apologize i should have gotten you before uh senator hickey but my mistake no problem
Senator Kim Hammer
Unverified
23:49
Thank you, Madam Chair. On the marketing, you do that through an external contract. Is that right? Yes, sir. Okay. In that arrangement with the marketing firm, are there any expectations of them to deliver where if it's not doing as well as it ought to be doing that, you know, they share some of the responsibility in that? Yes, we have an expectation for them to deliver. Absolutely. We turn things
Speaker 30
24:13
down from them all the time and say this isn't good enough we need something better. But do you ever take money back
Senator Kim Hammer
Unverified
24:23
because it didn't perform as well or is that solely on you or do they share any responsibility? It's
Speaker 11
24:28
solely on us it may be a game it may be I don't know that I can pull something out and
Speaker 14
24:34
say this was because of advertising. Now if they went back and for some reason or another failed to actually run advertising or ran the wrong advertising or things of that nature we have make goods uh and things of that nature so if they did something
Speaker 15
24:49
wrong to where they actually didn't follow our instruction or made a mistake yeah absolutely but if the commercial yeah i don't
know how to judge whether or not a commercial is responsible for x amount or x amount if it was a
Senator Kim Hammer
Unverified
25:03
better commercial than a last commercial but you do take consulting from them as far as which direction you go to make your decisions correct yeah absolutely okay and then for entities whose label you are using to market tickets do
they get a percentage of those tickets in exchange for using their brand some of
Speaker 15
25:20
them get a licensing fee some of those licenses are just held by scientific games and are free to us it
Speaker 14
25:27
just depends like a wonka we paid a licensing fee on it
that Razorback ticket we paid a little licensing fee on it but we've done say pie pie or betty Boop or any
Speaker 15
25:37
type of licensing, we may have to, or Scientific Games may own it and allow us to use it
Senator Kim Hammer
Unverified
25:43
for free. Okay, so I'd like to get a list of what you paid last year to those entities as far as royalties or fees or whatever it is, if
you don't mind, please. Thank you. Thank you, Madam Chair.
Speaker 77
25:59
Any further questions? Representative Cervillo. Thank you, Madam Chair. On your marketing, could you...
Sorry. On your marketing, can you break it down, how much of it is going to be social media, how much print? Do you have an idea? I can give that to you. I couldn't spout that off the top of my head right now if you want. Okay, just in general, I'd like to have that, but it's pretty balanced. Because I know from an advertising standpoint, there are certain things that provide a better margin. Absolutely. Yeah, and so I know that in some
Speaker 82
26:32
cases they would push print over maybe a social media and so forth like that.
Speaker 14
26:37
So to your point, we have moved much further into those mediums that are quicker to market and have a smaller cost. So in other words, we've moved away from a lot of TV, we've moved away from a lot of print advertising, things that are almost immediate or faster to market. or items that cost us a lot of digital and things of that nature we've moved to because they're cheaper they allow us to move faster we can be a lot more expedient about what we do
so i can't spout off top
Speaker 30
27:13
of my head the percentage breakdown but it has moved significantly from traditional to what
Speaker 22
27:20
you would probably count now something that is a little bit cheaper and is a a little more immediate. Could you forward that
Representative Fredrick J. Love
Unverified
27:30
to? Sure can. Absolutely. Representative Love. Thank you, Madam Chair. Mr. Woosley, I'm looking over this. Do we do anything for
Speaker 14
27:39
are required to pay $20,000 a year. We pay that to the gambling helpline
and we are currently certified through the National Counseling for Responsible Gambling. We have to have quarterly meetings. We have to review our product. We have to be recertified every year. We have to do retailer training, things of that nature. So from a monastery standpoint, it's only $20,000. From how we handle everything we do internally, there's
Speaker 30
28:07
a great deal of man hours dedicated to that. Okay. All right. Thank you.
I think originally that was $200,000, and Mr. Wu, is that
Speaker 30
28:19
correct? Yes, ma'am. The background of that is it was $200,000. What we found was about $20,000 of that was going to the, we didn't make the change, by the way. That was a statutory change that we didn't ask for, so I see that, look. After a
Speaker 14
28:36
few years of doing that, we're paying it to DHS, and they were designated with, I think it was DHS. were designated with spending the money and determining where it went.
Twenty thousand or so dollars went to the gambling helpline, which is on every piece of advertising we have. And then the other hundred and eighty went to a lot of halfway houses and drug treatment facilities.
All right. I'm going to move on. Do you have another? Do you have another question? Who? Okay. Senator
Senator Jimmy Hickey, Jr
Unverified
29:09
Hickey. I'm sorry, but this is this is somewhat important, I think. I'm back on the comparative income statement year-to-date, November 30, actual versus budget. Now, I hear what you're saying, Bishop, about the larger jackpots and all that.
But did we not budget in that we had those larger jackpots before? And we were anticipating hitting this budget anyway, weren't we, even with those in there? because if i understand we look at the actual but are we actually aren't we doing worse than what than what we actually thought we were going to be doing because from a budget standpoint yes sir okay what are we going to do to turn that around that's that's where i'm at right now and i
know you all have done a lot of work and we've had some great runs and we were worried that we were going to have these peaks and valleys but I guess at this point what what direction are we going to have we're sitting here looking at these comparative income statements based off of what we budgeted we went ahead and factored that in that we had those larger jackpots that we had those larger jackpots and everything so we took that into amount so it looks like to me that we're actually not even making what we were supposed to be doing.
So I guess I want to know what y'all's plan is or what Camelot's plan is or what y'all's discussions behind the
Speaker 11
30:38
scenes have been. Yes, sir. We're upping instant tickets for the year. But
Speaker 91
30:42
I'm looking at the overall, and that's what matters for scholarships.
Speaker 11
30:46
I recognize that. If the draw games aren't there, they aren't there. I can't force that. But what we have
Speaker 14
30:52
done is, given that they're growing at a lower pace and a slower pace we changed a little bit of our jackpot strategy and when we start our advertising so for the past two years we didn't start it for say 400 million dollars well we've
moved that down because we have less and less jackpots and they're at lower rates so we trigger jackpot advertising at a lower rate now because we're just not seeing we wouldn't be advertising
Speaker 15
31:16
at all if we if we waited to four or five hundred because it hasn't happened that way this year things of that nature we've shifted some more into social to try and help player engagement things of that nature you can't get a
Speaker 14
31:30
lot of earned media with these jackpots because they're lower when they're 500 you can set up a little event and all the news stations will come for
free and cover it and that gets people excited when there's nothing to excite people you have
Speaker 15
31:42
to create your own excitement so that's a little bit of one of the things we've done some of the reasons that the advertising is a little bit more right now is we're having to rely on our instant tickets more so we're having to advertise them a little bit more to try and make up for what we've lost in draw games so you just take and shift around depending on what is selling at the point you know i would love to say i could turn advertising on at 40 million or 100 million or 120 and it would spur people to go out and buy but it just doesn't you've got to you've got to
try and formulate your strategy for the state that you're actually in i understand
Senator Jimmy Hickey, Jr
Unverified
32:19
but from my standpoint and everybody here and i think it's our responsibility as the oversight committee i'm sitting here looking at a four million dollar uh less than what what we budgeted so and i knew that madam chair that we were receiving reports from like camelot and having them to come in you know to be honest and again you all have done a great job and i want to go ahead and publicly
say that but i also want to make sure that we stay on top of this thing and then whenever we start seeing stuff like this madam chair if we could get camelot back in because that's
what they get paid those bucks for and i want to know what their idea is of uh how
we keep moving how to turn this around yes thank you ma'am certainly we can do that
thank you mr woosley uh does um Um, does what's happening with us now kind of follow historical trajectory of other states
that have been in the lottery business, say, about our length of time
Speaker 22
33:22
or longer? Well, I don't want to minimize anything. Where
Speaker 14
33:27
we are right now with Mega Millions and Powerball is where everyone in North America is, right? Or it's in the games. I'm I don't everyone is experiencing the same sales drop as we are this is a national trend so if that's what you're asking that's not exactly what I'm
asking me that that's pertinent to what I'm asking but when we
first started with the lottery one of the things we were told with excitement and everything that goes on that we could expect that as we go along that not necessarily these dives and ups and downs, but that it was not unusual for us to expect that this might not be something that we could depend on to stay, for lack of better terminology, at the level that we've
become used to, or is that just a matter of economic forces that causes it to go up and down? I guess it's economic
Speaker 14
34:28
forces. This year, it's the draw games. from every other standpoint, we're as healthy or healthier than we've ever been. I know that doesn't look like it when you're looking at these numbers, but from an instant ticket standpoint, if our instant tickets are beating the
Speaker 30
34:41
previous two years, which were the best years we ever had at the lottery. Well, for our
next meeting, we'll look at perhaps getting Camelot to come talk to us about this
so that people can get their more in-depth questions answered if there's such a thing. Senator Hammer, you have the last question on this report, and then we'll
Senator Kim Hammer
Unverified
35:03
move on to item D. Thank you, Madam Chair. I'll direct this to Mr. Woosley, but maybe staff can advise me. Is DHS the clearinghouse for monitoring all calls for gambling addictions? No, sir.
Speaker 11
35:17
We get that report from the call center that does that.
Senator Kim Hammer
Unverified
35:22
Does that call center segregate the calls from horse gambling, lottery, and others? I can't remember. Yes, sir. That monthly report is on our website, and
Speaker 14
35:31
it does designate what the reason for the call was, and whether it's a lottery, casino, whatever it may
Senator Kim Hammer
Unverified
35:40
its fair share? Is it $10,000, or have you analyzed those numbers? There's less lottery than
Speaker 30
35:47
there are other things, if that's what you're
Speaker 81
35:49
asking. But we're happy to contribute whatever the legislature wants us to contribute.
All right. Thank you. Just remember that. representative servilo
Speaker 77
36:00
yes director let me ask you have you done any comparatives from the lottery to of course now we've expanded casinos and has that had an impact or have you done any comparatives it's a difficult situation to
Speaker 11
36:14
determine because you don't know if the people are spending your the lottery money
Speaker 14
36:19
that they normally would spend on casino so far it's not affected us in Jefferson County, and it's not affected us in Garland County. In, forgive me,
West Memphis, I've gone blank. Crittenden County. In Crittenden County, we were down, which given that we're up almost everywhere else, you'd have to believe that there's some significance to that.
Speaker 30
36:41
I don't have the ability. Just one second.
Guys on the House side, if y'all could keep it down just a little bit, because it's reverberating up here, so I would appreciate some help. Thank you. I
Speaker 14
36:55
don't have the ability to track dollars spent through other things internally that says, yes, this money that would have been spent for a lottery went to Southland
or Oakland or whatever it may be. But you would have to just by bandwidth have to assume at some point when the expansions, when Saracen is fully complete right now, it's just a warehouse down there that's connected to their Q store, I think is what they call it. Does anyone know when that's going to be done? May, something like that? I'd probably be able to tell you in June whether or not that's going to affect us, because right now there's just 300 slot machines down there. In May, there'll be a full
fledged casino. I think Oakline may be expanded, started in August, and they may have fully expanded sometime here in the last month. I saw an article the other day that sports gaming's about to go mobile, if there's a rule change, that will
Speaker 30
37:50
affect us. That will affect us. Mrs. Representative
Sebylla, I'm going to move on to item D. Thank you for your response, Mr. Wilsley. These are
Speaker 30
38:03
just the standard disclosure reports, and my report that I just
presented is based on those, so I'm happy to answer any other questions that are brought by those, but this is basically my report, this PowerPoint is distilled down from those. does anybody have a question
on item d you want a few seconds to take a look i'll pause for a second see if you do
representative payton thank you madam chair and director this is totally
Speaker 54
38:38
uninformed on my part but i just turn the page and see zero dollars collected
Speaker 52
38:43
on child support Can you elaborate on that at all? Well, if, excuse me,
Speaker 11
38:47
I'm talking to the microphone. One of the things we do is if a winner comes in and they owe
Speaker 14
38:53
Child Support to the office of the clearinghouse, the Child Support Clearinghouse, which is run by the state, we withhold that money. We didn't have any winners this month come in who owe Child Support, because that's why it's zero. To date, we've withheld about $548,000 in child support over 10 years
and captured probably about $1.2 million in tax money owed over the course of 10 years. So that kind of, it varies. We had a $48,000 one come in one time. He wasn't very happy. Thank you, Madam Chair.
All right, sure thing. Any other questions? Senator Hammer.
Senator Kim Hammer
Unverified
39:27
Thank you, Madam Chair. Is there any way for you to break it down and add a column, and and you can get it to me if it's separate as far as what the amount per resident is so we
could look at it county population against the expenditures there and the reason i'm wondering is like sling county's got a high percentage and some other counties that that i might not have suspected would have as high as they are and is there any any correlation between what's spent in the county based against the population in the county or I guess with people passing through on the interstate or whatever there'd be no real good way to do that would you're
Speaker 15
40:05
probably any any county that has an interstate running through it is probably going to have a higher sales rate just by virtue of the exposure all right thanks
all right any further questions if not then we
we'll move on to item F.
Speaker 14
40:27
Chair. We are required every year to, I guess actually, we get an invoice from the Department of Higher Education that requests reimbursement for expenses. This year we received a reimbursement request for $427,384.29. That is based on regular salaries of $225,090.72, personal services matching of $53,004.75,
and an operating expense of $149,288.82 for that total of $427,384. And my assumption is we have to get
Speaker 30
41:01
this reviewed before we can pay it. Any questions, anybody? Okay, Senator Hickey. I'm sorry, I was still
looking at the other one. Okay. Do
Senator Jimmy Hickey, Jr
Unverified
41:16
we have what that's been in the previous years, how that compares? And if it's on here, I apologize. I was
Speaker 122
41:25
still looking at your other. I don't, but I don't think it varies much at all versus previous years.
Senator Jimmy Hickey, Jr
Unverified
41:31
But if you want that, I can send it to you. I would like the last few years as a comparative. Sure. And to be honest, in the future, I think it would probably be beneficial just for us to
be able to keep an eye on how it compares to past. Expenditures. For that report, Mr. Wilson, if you send it to staff, because I'd like
Speaker 30
41:52
to see it as well. Just send it to staff, that report. I'm hoping Ms. Piltratz is writing all this
down for me. Yes, ma'am. We'll get everything you need. Okay. Well, that one's all I need. Any further questions on this report?
If not, a motion to review. Is there a second?
We've got to pay people. Okay, we have a second. Second.
Any further discussion on the motion? If not, all those in favor, aye. Aye. All those opposed, no. Okay, it is reviewed, item F. So that takes us to item G. That's Dr. Markham.
Mr. Woosley, did we skip anything? I think we skipped F. We skipped, what did I skip? Which will be real quick. We voted on
Speaker 14
42:47
ahead and then do that exhibit f is just a reporting mechanism that we're required to do under the statute requires us to give you the total amount of fy 2019 net proceeds which was 98 million six hundred and thirty nine thousand and forty dollars which was our best year ever also requires us to provide the balance of the shortfall reserve trust account in fy 2019 as
As you can see, it was never below $20
Speaker 30
43:16
million the entire year. It also requires for us to give the official projection for
Speaker 11
43:23
net proceeds for this current fiscal year, which is $89,350,000. All right, questions, anybody?
Senator DeHammer. Thank you, Madam Chair.
Senator Kim Hammer
Unverified
43:33
That $20 million that's sitting in there, Senator Hickey's question a while ago about the direction that it's going in your comments is there any connection between between that 20 million dollar reserve and the
sales not doing as good as they are and would we does that connect to that any
Speaker 14
43:54
at all we're required to fund that at 20 million dollars no more no less and if we get a request from mrs markham and adhe and there's not enough funds in the proceeds account we pull money out of that to make that payment. We haven't had to do that in probably three or four years. We're in pretty good shape. And then if we do pull money out, the next month or the next month, depending on how much it was, we have to refund
that to $20 million. So it is just a static $20 million account that hopefully we never have to touch. Well, given the fact you
Senator Kim Hammer
Unverified
44:27
haven't had to touch it in three or four years, is there any reason why it couldn't be lowered and some of that be directed to better payouts, or what would be the dangers of that, just the risk of if it took a big dip
Speaker 81
44:43
or what? It's possible, absolutely. It's statutory, so you all have to change it. We don't have any control over that.
All right, thank you. All right, Senator Hickey? No, no question. All right,
anybody else have a question? All right, if not, then I think that does conclude your reporting, doesn't it, Mr. Woosley? I think I've got to come back in a minute. Okay, yeah. For right now,
Speaker 128
45:15
though, you get a break. Dr. Markham. Good afternoon, Madam Chair. Maria Markham, Director of the Arkansas Division of Higher Education.
Speaker 129
45:22
First off, I would like to address Senator Hickey's question about the operating costs. We're actually about $25,000 down this year from last year. So we stay pretty level. I mean it's just the cost of our few personnel that manage our scholarships in our universal application and those costs haven't changed I try to limit my recommendation to one per year the area where I think our students could benefit the most from a change from this committee would be the creation of an appeals committee for students who lose their scholarship for some
reason. When a student completes their universal application and is awarded the challenge in any other state scholarship, they sign a contract in which they acknowledge the requirements to remain eligible. However, for whatever reason, we have many students every semester who fail to meet those continuing eligibility requirements. Sometimes it's through no fault of their own, a catastrophic event, or something that they consider catastrophic that I don't believe you or I would agree would be catastrophic, but we don't allow students to have any recourse to appeal
that process. So I think it would be good policy for students to have a mechanism to appeal for the reinstatement of their scholarships across all state scholarship programs. Dr. Markham, what are
the accepted reasons now for extending that scholarship? There are some, aren't there? There are some.
Speaker 129
46:51
Typically, it's medical. So if they've had a medical catastrophe in which they can't enroll and they need to postpone enrollment for a future semester, they can appeal to the
division to put their scholarship on hold. Sometimes students don't do that at the time that they choose not to enroll. They wait for semesters at a time, then come back asking for reinstatement. We have other situations that I think it's arguably not catastrophic, but still should be up to someone to make the decision whether or not that student could be reinstated. As the statutes are written now, I don't have the authority of discretion. So if it's a mistake made by the division,
then absolutely we always make that good for the student. But sometimes it
Speaker 134
47:36
is the student's responsibility, but they probably could use a little grace in some circumstances.
So for example, right now, if there is, say, a death, the mother
or father, let's say. Is there a time period that students are missing? There's a time period by which they need to report that catastrophic event. And if they don't, is that an example of where you're talking about a grace period? Yes. Okay.
Speaker 137
48:05
Yes. So most of the requirements
for scholarships give them a certain
Speaker 129
48:10
date in which they are to meet their continuing eligibility requirements. You know, there are circumstances where students, you know, have catastrophic circumstance, but instead of appealing for, you know, to be put on hold for a future semester, you know, it could be six months before we hear from them, and then they've already lost their scholarship, and
we don't have the ability to reinstate. Okay, and who would make that decision at
Speaker 129
48:36
ADHE? Well, now I do if I have the latitude within statute. So some of our scholarships are
very specific. If you say there are no mechanisms for reinstatement, so I don't have any ability to make those discretionary decisions. Others are a little more broad. They say for catastrophic reasons, then I could make that decision. But I think some uniformity would be helpful in a process or even if I were given the ability to promulgate some rules to allow for a committee to be formed. I know on a campus level, we always had an appeal process. So there was a group of people who could hear the circumstances and make a decision. All right,
any questions from the rest of the committee?
Who was first? Senator Hammer, and then I've got Representative Godfrey.
Okay, Senator Hammer, you're recognized. Thank you, Madam Chair. so this must
Senator Kim Hammer
Unverified
49:26
be a big enough issue that you're coming before us with the one and only shot that you referenced so how many cases have you had in the last year that you feel that this is actually going to impact um i would say personally that
Speaker 129
49:42
some students give up before they get to me you know they'll call the financial aid office and
Speaker 137
49:49
they're told that you know there's not an appeal process and they give up at that point some you know make it to the governor they make
Senator Kim Hammer
Unverified
49:58
it to my office. And when they're admitted to college and they go through all the advanced counseling you know the orientation day and everything are they
advised at that time that this is an option if something happens they have some relief through
Speaker 129
50:12
the catastrophic policy? I would not I would not venture to guess that that would be something that happens at orientation. If it were an institutional scholarship yes their financial
aid office should tell them that since this is a scholarship that is administered through the state we don't have a state orientation now it's in their contract it's in the rules it's on our website but whether or not students completely understand that
Senator Kim Hammer
Unverified
50:42
is another question okay we passed a law a few years ago where if a student graduates the fall with zero credits that they forfeit their scholarship money coming into the spring.
Is that going to have any, is the change going to have any effect on that population that graduate with zero credits? I don't believe so. I mean, it finished the previous
Speaker 129
51:03
semester with zero credits. No, that would not be a situation in which an appeal would
Senator Kim Hammer
Unverified
51:08
be appropriate. Even if they came and said, well, I couldn't complete the semester and it's February and I need some relief, and then they would be paid the money anyway?
Speaker 128
51:16
Well, I think a student who had a catastrophic event already has that option to request that.
Speaker 129
51:23
But I think the question comes in when, is it truly a catastrophic event, or did a student just not follow the dates and the timelines set forth? And does subjectivity need to come into that? So if those
two things intersect, they just intersect. But you don't
just get a pass because you didn't accrue any credits. Yes. Okay. All right. All right. Senator Hamer, you may go ahead.
Senator Kim Hammer
Unverified
51:49
Are you finished? No, I was going to ask. Go ahead. That bill we passed several years ago about, I'd like to get the dollar value, because I think that was paid on last semester's enrollment, that dollar amount, as far as how much was withheld in scholarships, because students complete the semester with zero credit hours, if you could get that to me, please. Sure. Thank you.
Representative Megan Godfrey
Unverified
52:13
Representative Godfrey. Thank you, Madam Chair. I do think this proposal makes sense. Were there any other ideas you considered other
Speaker 128
52:24
than the appeals process? We have a lot of ideas on ways to improve some of our scholarships. We have quite the menu of scholarships in Arkansas. We have more individual scholarships than any other state. So we have some ideas about that, ways to make them more consistent, a little more student-friendly. But this is the issue that I
hear most often from students and parents and as well as members because many times that student appeals to you and then I hear from you and then we have to talk about what constitutes you know catastrophic circumstances and it is truly subjective and I think every student would appreciate some standard that everyone was measured by. Okay is that
Senator Jimmy Hickey, Jr
Unverified
53:07
it? Senator Hickey? Yes ma'am of course I think some people around this I'm kind of concerned about this Sounds like one of those subjective things to me that could get political.
You know, somebody says, well, they just barely missed it. They're going to start calling your office, or one of us is, or somebody from the executive branch. How do you propose
to keep that from happening? That already happens. I know it does. But right now, whenever it's in statute and you don't have that leeway, it doesn't happen.
Is that correct? Because you just said that a lot of these scholarships, and I believe the academics that way, is that if it is set in statute, then you're not going to do it anyway.
So with this, I see that that could cause more of an issue. So I guess what I want to hear is how do we keep that issue from happening? Is this something we're going to vote on today, or
Speaker 128
54:03
is this just presented for our review? This is just presented for my recommendation. and it's really just an idea that we
Speaker 129
54:10
we consider developing some type of appeals process so on campus we had a standing appeals committee and we had basically three reasons you could appeal
it was medical um you know it was an act of god there were some big reasons it couldn't be just you know i didn't check my email all summer and i missed the deadline which is the most common call that i get which we don't make exceptions for that that's obviously not something that would be eligible but at this point i'm given a lot of latitude to decide what's catastrophic but there's not much there to support my decision so i feel like um i don't know that i could support some of the decisions that i've made to you guys when i have students coming to me
with very subjective reasons for wanting their scholarships to be reinstated Okay. Matt Coutinho.
Senator Jimmy Hickey, Jr
Unverified
54:57
Yes. So since this is just a recommendation by you, if you all are planning on going forward with that, that is what I would say that I would most be interested to see because I believe you'd have to have legislation. Yes. Is I would somehow want to make sure that we do everything we can to keep that part out of it and that possibly there is a legislative oversight or somebody like that that would
have to review these things or whatever. I don't even have to be on the committee. Right. I just want to make sure that as we're thinking about this, and there are those cases, and I understand that, and I appreciate you bringing this, but I want it to be the exception rather than the rule, and I want that thing so that everybody knows what's happened and what's taken place. Otherwise, what I'm worried about is we'll get somebody that was supposed to have made a, whatever is it, a two-point,
a two-point, and they made a 1.99, and you say, well, yeah, that's close enough or something like that. I want to make
sure we keep those type of decisions out of the process. Sure. Thank you.
Representative Vivian Flowers
Unverified
56:12
All right. Representative Flowers. Thank you, Madam Chair. I would echo Senator Hickey's concerns, but probably extend it to, and I think you just said this, it's happening now, it sounds like there is already a sort of
unofficial appeals process that requires you to sort of be all over the place responding versus one pathway in which a student would appeal and one definitive objective board instead of rules versus sort of stuff. That's what I'm hearing. So it's, and I'm also, I heard you say something about promulgating rules but then legislation. Can you kind of clarify for us what would need to happen from this point if it's something that you move forward with? So
Speaker 129
56:59
happen would be in regular session we would need to be directed to promulgate rules for an appeals process. So we would go through the rules promulgation process with our board. It would come back go out for public comment and then ALC would approve whatever rules we wrote. So we would have to be directed by statute to start that process to promulgate rules.
And if we if we need to go any further than than that of course we'll have time to think about that and what might be helpful as well as we're thinking about it is because you're the one who's experienced it
if you could commit to writing something that might be useful although I know we have time going to the regular session but that would be good and most importantly I think what people is so concerned about the creep, what would be the guardrails for the creep not to happen. That would be great. Were there any further questions on this?
Senator Kim Hammer
Unverified
57:54
Senator Hammer. Thank you, Madam Chair. You're wanting a firewall between you and the decisions that are made, basically, through what you are going to bring as far as a recommendation in the policy, I'll call it, or the legislation.
Speaker 137
58:09
Is that a fair statement? It is. I think that if you're going to allow a student
Senator Kim Hammer
Unverified
58:18
to appeal, there needs to be more than one person being the decision
maker for a student's outcome. Right. And so this would universally apply to all state scholarships, no matter what university they're in, so that if I'm enrolled at U of A or I'm enrolled at ASU, this would be the same set of rules across the state? Yes. But it wouldn't apply to private
Speaker 137
58:38
institutions? It would, if the student is receiving a state scholarship.
Senator Kim Hammer
Unverified
58:42
Receiving a state scholarship. So individual universities have their own latitude with regards to scholarships that are based there. Absolutely, yes. And this isn't going to cross that line. Okay, very good. Thank you.
All right, thank you. Any further questions? If not, Dr. Markham, thank you for the
suggestion, and we will look at this
further down the road. Mr. Woosley, you're back. All ready? Item H, that says Bishop Woosley.
Find item H, everybody, so you know who we are. Let me know
Speaker 30
59:39
when you're ready. I'm ready. Representative Sorvillo, I requested what you asked for in the interim. Do you want me to give that to you now or after the breakdown?
Speaker 11
59:49
Okay. In February of 2017, we signed an advertising and marketing contract with CGRW. It
Speaker 14
59:59
was competitively bid. There were several different agencies who bid to win that. It was awarded to CGRW. We are proposing an amendment to that contract, it is a very simple change, it is adding one line item to allow for a charge that was not previously allowed.
We're requesting that a category be added to the cost schedule for creative development at $115 an hour. This is actually a rate that is somewhat reduced from the normal agency amounts, which can range from about $125 to $185 an hour. is a technical change to the cost schedule does not add any money to our budget our budget stays the same it simply adds a billable category that we have found over the last three three and a half years however long it has been
that we need from a lottery standpoint after three years of working with CGRW and obviously probably around four was working with our consultant and our other vendors at that and going through some of the modeling we have some things within our agency and within cgrw that allow us to determine what types of advertising are more profitable have more impact things of that nature we have econometric models which it took me about two years to learn how to
even say that which tell us which parts of our advertising are more effective and whether it be TV digital outdoor out of home etc along those lines the the result of that and having more knowledge about that is obviously you've
Speaker 15
1:01:39
seen over the last three years our sales have increased and we've been doing very well outside of some of these draw issues we're
Speaker 14
1:01:49
having this year the byproduct of that is we're asking more out of our advertising agency than we ever
Speaker 15
1:01:56
have before. There's more lottery product advertising than ever before. Our older
model relied a little bit more on the traditional products like a TV commercial or a radio commercial. And some
Speaker 14
1:02:07
of you who are campaigning and have done campaigns, you know you go and shoot a couple of TV ads and you can run those for four or five months. That's not the case with us anymore. Our advertising doesn't have the shelf life that it did before. Sometimes our games sell faster than you know if we plan on having a TV commercial for two months maybe the game sells out before that so there's things that need to be quicker to market and we need to be more responsive and agile when we do our
advertising and that's what this is is adding this this category to allow them to charge us for creative development which we need from our agency to help us we have more competition now in the state with the casinos we just have more competition for the average dollar to be completely honest with you there's a lot more to buy and do now than there ever has been before I mean these I'm buying or my daughter wanted to phone for Christmas I had no idea they were now $1,100 so I mean you think about things like that it's just things just cost more now and there's people are spending more money we have a new lottery down in
Mississippi and they have the capabilities of running ads that reach into Arkansas we have two new casinos and two expanding casinos here in arkansas one of the reasons that we have shifted some of our money to digital and digital outdoor is because it's simply it's cheaper it's faster but coming with that you also have to have a team that can come up with those ideas and develop those ideas quicker than say hey we're going to do a commercial where you know something funny happens with a horse and we're going to run it
for two months well the creative and that may take two weeks to to do and you run that commercial for three or four months whereas if we're running an immediate campaign I need a team of people at my ad agency to sit down and come up with a concept and develop that concept and put it into print put it into a digital ad or whatever they may need to do so the amount we're asking from this agency is much more than it was three years ago in fact our advertising budget was less three years ago than it is now so it takes us more to compete and this is one
of the things we think we need to compete we're not asking for a higher budget this is not something where i'm coming to ask more this will be something that is paid to cgrw at our discretion when it is needed the time spent with digital media now is more than ever before it's a growing part of our strategy it's part of attracting more players for those of you in here who have an iphone which i assume it's every single one of you i can't imagine how much time you spend on that iphone every day that is the new delivery mechanism for advertising and
marketing everywhere it will become more and more important and those ads have
Speaker 15
1:04:47
to be quickly done and they have to be done by us and our advertising yes ma'am um i think we
pretty much got the point of that but so why don't we start right here and see if people have questions because i'm understanding this is a calibration within the contract itself yes ma'am based on uh needs that that have changed. Am I characterizing that correctly? You said it a lot shorter
All right. Representative, I'm trying to see if a member has a question first. If not, Representative Payton. I'll get you Representative Sybilla.
Speaker 52
1:05:27
Thank you, Madam Chair. So, Director, we discussed earlier
Speaker 54
1:05:30
that it's an $8 million advertising budget. How much of that $8 million flows through this
Speaker 14
1:05:38
contract? All of that, they're our advertising vendors, so all of our spend flows through them. Now, mind you, the majority of it is our purchasing of TV, media, radio.
They don't get $8 million. They don't make $8 million off our
Speaker 54
1:05:54
contract. So if I can follow up. You may. So in the contract, the top line is they get 13% of media costs. Yes, sir. So they're getting 13% of theoretically $8 million, which I know they're 13% in the $8 million. But anyway, they've got slack there to get close to a million dollars in commission off of our budget. At the bottom of the current price sheet, it says external printing, external TV, radio, website creative, website hosting.
That's all going to be done at cost, sublet, and then billed to us at cost. The only two line items that are hourly is public relations director and public relations coordinator. Can you
Speaker 11
1:06:34
tell me how much those two line items have been costing us? For FY19, social media was 2,338 hours at $222,557. What line is that on? It's the social media billing at $95 an hour.
Okay, thank you. Got it. Okay. PR time was 129.5 hours at $17,368. dollars. The media commission, which was the 13% you referenced, was $623,073. Okay, so do we have a projection on what this $115 an hour is going to
Speaker 54
1:07:11
amount to? I don't. I mean, it's going to be based on
Speaker 52
1:07:17
what we allow them or what we need from them.
But essentially, if your advertising budget is not
Speaker 54
1:07:25
changing, then it's going to have to come out in other words if you're still going to spend eight million dollars it's going to have to come out of your media buys
Speaker 14
1:07:37
it's going to yes it's going to come out of something within that whether it be a media buy or whether it be research that we made there you know whatever the spend may be within that eight million dollars you're absolutely correct so there may be less media buys however the challenge to them would be you need to do
better with your media buys you need to fight harder for us for the free media buys that we get the i don't remember what
Speaker 30
1:07:59
they call them but more or less when you buy an hour you usually get 30 minutes or an hour free okay and i have one more question
Speaker 54
1:08:08
i promise it's the last one no no go ahead that's so when you do a media buy especially television but even radio you get some free creative from that tv station from that radio station in helping you create the ad right No, sir. No? No, sir. We're in the car business. I need to help you. Well, come on down.
Speaker 11
1:08:25
You know, I guess you can. I mean, usually you hear Tommy Smith read in the morning or something like
Speaker 14
1:08:30
that. I mean, I think I heard a bunch of whatever the steakhouse out in West Little Rock was along the way. These are our
Speaker 30
1:08:37
own ads. They're about our games and things of that nature. That's not to say that we don't ever do something like that to where we have a talkover point or whatever you call it, or we sponsor an hour of the buzz or something along those lines. But no, generally all of our creative is done internally because it's a gaming ad and there has to be certain things done with that.
We don't, there are limitations on what we do. There needs to be certain, we have to read the helpline number, we have to give the gambling warning and things of that nature. So we do all that internally unless it's like a live promo event. Okay. Thank you. Thank you, Madam Chair. You're welcome. Senator Hammer. Thank you, Madam
Senator Kim Hammer
Unverified
1:09:18
Chair. This contract with them was renewed in 2017, is that right? I was trying to get the timeline down. I believe it's a five-year contract. Okay.
Yes, sir. And I'm just curious, were they not farsighted enough to see that they were going to need something like this department then, that smartphones were out two years ago and now we're having to come back and create this? I don't
Speaker 22
1:09:41
know. I mean, that's an example I'm using. I don't know that we were farsighted enough to know
Speaker 14
1:09:47
to where media and advertising and marketing is going. I mean, it moves so fast that it is so vastly different than what we did three or four years ago. And I'm not an advertising marketing genius to be able to look into the future.
And part of our business plan, one of those things we brought our consultants in to tell us what we needed to do. So
Speaker 30
1:10:07
they didn't come along until about three and a half years ago. and maybe
Senator Kim Hammer
Unverified
1:10:12
this along the lines of representative payton's question but what are they how what are you adjusting to create this opening within the contract where is it which where is it going to be taken out of that you're not going to need to raise your advertising budget it could be taken out of a buy it could be taken
Speaker 14
1:10:30
out of nothing depending on what how much of this we do or don't
use it could be taken out of some of our insider research that we do but again ideally you know my direction to them is if you get this my expectations will be
Speaker 30
1:10:43
even greater for the product that you give to us and the services you give to
Senator Kim Hammer
Unverified
1:10:49
us and did procurement help you in structuring that contract because I'm one side of me is wondering why do we handcuff you that you have to come back before us in order to be able to make real-time adjustments if this is a legitimate request? And why was it restricted down that tight?
Speaker 122
1:11:06
We're talking about state procurement back three and a half years
Senator Kim Hammer
Unverified
1:11:09
ago or three years ago? Whenever the contract, you got state procurement to draw this up when you put
Speaker 30
1:11:14
it out for the RFP? Yes, so we collaborated on it for sure.
Speaker 14
1:11:18
Again, I didn't know there were going to be two new casinos three years ago. There's just things you don't know. There's things that happen, and you pivot, and you reverse, and you do whatever you think you need to do to fight that and combat that. Being able to be more immediate in the minds of players and respond to trends more immediately
is something that will probably accelerate even more as we go. So
Speaker 30
1:11:40
we did the best we could with what we knew three years ago. All right. Thank you, Madam
Speaker 191
1:11:55
Chair. You're welcome. Representative Wardlaw. Thank you, Madam Chair. Mr. Woosley,
Representative Jeff Wardlaw
Unverified
1:11:58
if you'll look at the score sheets that you had, there's three of them here. And on every one of them, for some reason, under qualifications and experience, you guys gave them 160 points.
And then if you look over on the right side, you show the max points is 100%, be 1,000 points, where the max points for that line item are 150. So is that a typo? I mean, you've done it to all three, so it's equal, but is there a reason for that? I mean, do we
Speaker 30
1:12:27
think they're all overqualified? This was from 2017, so I honestly don't know the answer to that, Representative Ward-Law.
Representative Jeff Wardlaw
Unverified
1:12:32
Is that not funny? I mean, it's 10 points more than maximum? The
Speaker 30
1:12:36
scoring is handled by procurement, and I'll be honest with you, I don't know if I know enough about that system to adequately answer your question.
I apologize, but I just don't know. I can ask them and get back
to you if you'd like me to. Absolutely. All right, thank you. Senator
Speaker 194
1:12:58
Ballinger. Thank you, Madam Chair. Mr. Woosley, so currently are we spending, we budgeted $8 million, are we spending $8 million with this contract? I would
Speaker 122
1:13:09
assume we probably come pretty close to it. Okay.
Speaker 194
1:13:12
So, and that's the thing that, to me, if that is the case,
if we're spending all $8 million, then that's, it's going to, we're going to have to take from one place to another to do it. But the contract itself is set up in such a manner that it is basically a new line item. So, you know, the way it is shown is that we're going to spend 13% with the media costs. We're going to spend the 35, the numbers that you went over. And now we're adding a new line that is not represented on here at all, right, and adding that in. And we're going to spend the, you know, $115 an hour for that. I mean, basically it's set up like it's going to be new money, save for the fact that we're capped off at $8 million.
Yes, sir. Okay, so I guess my question would be, would you confirm that we really are spending about $8 million? Because if not, then really this is new money. But if it is, if we're spending $8 million, then it's not. I
Speaker 11
1:14:04
would be surprised. I'm not aware of a situation where we did not bump up against our advertising budget every year. Okay. And it is mainly because,
Speaker 14
1:14:11
you know, to Senator Hickey's point, if I'm not doing my best to make what I'm supposed to make, If I came in here and fell below budget and I only spent 7.2,
Speaker 186
1:14:22
y'all would say, well, goofball, why didn't you spend the whole amount?
Representative Johnny Rye
Unverified
1:14:31
All right. Thank you. All right. Representative Rye. Thank you, Mr. Chairman. Sir, let me ask you this question. As
time is going on, say three or four years ago when all this began, you had television, you had radio, and now you do have social media, like what you were speaking about, do you find yourself adjusting your budget each year for those?
And what percent do you think each year, sir, that
Speaker 117
1:14:57
that's changing at? Do you mind if I look at
Speaker 14
1:15:02
my phone real quick? I can tell you. I don't know that I can give you exact amounts. What I can tell you is, so, for instance, I mean, to Representative Sorvillo's request, this year our TV percentage is 40, radio is 24, out-of-home, which is digital billboards, and sunshine billboards which is those billboards you see with the actual numbers up on them uh digital and social media and print so out of home is 17 digital and social is 19 prints less than
one percent i would say four years ago our tv's 40
Speaker 15
1:15:31
now it was probably 60 or 65 then our radio is 24 now it was probably 30. our digital uh if i remember when we started this contract i think our digital was five percent uh so you just you know how many of you run
Speaker 14
1:15:48
facebook ads when you run a campaign i mean you it's the most fast deliverable that you can get and i'm gonna be honest with you i mean i'm probably the most i should be there should be a case study on me i
don't ever watch a commercial i don't watch any live tv at all
Speaker 30
1:16:05
anymore and so there's there's 40 of what we do that is, I'm not seeing.
So all that change in technology and delivery is part of what's driving what you're doing? Absolutely. Yes,
ma'am. Okay. Let's see. Thank you, Mr. Chairman. Thank you. I'm sorry. Were you finished? I apologize. Yes, my mom finished now. Thank you so much. Okay. Representative Sorvillo. Thank you, Madam Chair.
Speaker 77
1:16:31
Do you have drop-ins? Do these particular games, do they supply you with some type of a template where you can do a drop-in on a local
Speaker 15
1:16:40
basis? You know, the funny thing is the answer is yes and no. So from a multi-state
Speaker 14
1:16:46
standpoint, when we do a big launch, so we've done probably three or four major changes in the games in the last 10 years. The first one was cross-sale, which means the group that sells megamillion states and Powerball states didn't use to let each other sell their products.
So in January of 2010, there was a cross-sale agreement where they agreed to let the other sell their products. So when that happened, there was a huge campaign, and I wasn't director yet, so I wasn't really terribly involved with that. Then we changed to $2 Powerball. When we changed to that, the group itself came up with a huge marketing campaign that was a commercial. The funny thing about the multi-state groups is every state is different in what they can and can't advertise. So, I think North Carolina or someone has a requirement that they have a disclaimer on every single commercial for lottery that is 13 seconds of every 30 seconds.
You know, ours may be four seconds. So, long story short, trying to create a creative that fits into 47 states' legal requirements is almost impossible, and generally, to be quite honest with you, they're just not very good. And so we use them if there ever are those, but it's only with the big changes. It's not on a month-to-month basis. Thank you.
Is that it, Representative Savillo? Representative Savillo, you're finished?
Okay. We have one more person on the list, and I think we should be prepared to go ahead and get a motion at pretty quickly here. Representative
Speaker 54
1:18:28
Payton, that's you. Thank you again, Madam Chair and Director. I understand the need for for what's being done here and and I want to say I support it I do have a question for you at the end and I won't go through a lengthy explanation here for it so we have a contract with a company that's two years old and I've had my iPhone more than
two years but regardless of that that contract was structured for media buys and they were commissioned for managing those media buys. And what you're telling us, and correct me if I'm wrong, is that we need to shift a lot of our budget from those media buys to the social media creative things and management of the social media. And that does warrant an hourly rate instead of a commission. And I understand that. And I do want to say again, I support that.
here's my question shouldn't we be looking at a new rfq and a new structure for a contract in the in the coming months or year to try to to have a contract with a company that is more structured towards the changes in in our advertising and what we're doing i don't i mean
Speaker 30
1:19:42
this is my personal opinion i've been here 10 years and dealt with three advertising agencies this is the best service we've got and the most.
Well, wouldn't they be eligible to bid on it? Right. Their contract goes through five years, so we have two and a half years left on it. So probably about a year out, you start that process of developing a new RFQ, RFP, whatever it's going to be, and it'll probably be different even than it is now because of the way the trends and advertising philosophies change. Okay. Thank
you, Madam Chair. Members, we're going to need a motion on this item, and just to clarify and make sure everybody understands what we're
voting on, we're not voting to change the
amount of the contract from when it was first put into place, but as I understand and hope I'm clear about this, this is discretionary authority within the budget itself to meet the needs of social media and as things have changed so much over the years. So I need a motion to, a motion? Okay, motion and second. Any discussion on the motion? All those in favor, aye. Those opposed, no. The motion passes. All right.
Thank you. Thank you for your patience today. Sure thing, sure thing. So we are at the annual report that we have to make to the Legislative Council. You should have at your seats something that's says draft. This is a draft of a report that we will have to make. We have to do this each year to the legislative council about the work that we have been doing in this committee and this is usually what it would look like as far as I know since this is my first year to be on this
to share this committee. Does anybody have any discussion about that draft? Anybody have any thoughts. If not, we will, Representative Chris Richie and I will submit this to Council. Is there anything else from anybody, any other, any other business? If not, we will stand adjourned. Thank you.
Agenda
A. Call to Order
B. Comments by Co-Chairs
C. Update on the Department of Finance and Administration (DF&A) Office of the Arkansas Lottery Activities and Operations [Exhibit C] - Mr. Bishop Woosley, Director, DF&A Office of the Arkansas Lottery
D. Discussion of November and December 2019 DF&A Office of the Arkansas Lottery Disclosure Reports [Exhibits D1 & D2] - Mr. Bishop Woosley, Director, DF&A Office of the Arkansas Lottery
E. Review of Arkansas Department of Higher Education (ADHE) Invoice for Reimbursement of Administrative Expenditures (A.C.A. § 23-115-801) [Exhibit E] - Mr. Bishop Woosley, Director, DF&A Office of the Arkansas Lottery
F. Review of DF&A Office of the Arkansas Lottery Reports (A.C.A. § 23-115-302) [Exhibit F] - Mr. Bishop Woosley, Director, DF&A Office of the Arkansas Lottery
G. ADHE Recommendations for the Arkansas Academic Challenge Scholarship Program (A.C.A. § 6-85-219) [Exhibit G] - Dr. Maria Markham, Director, ADHE
H. Proposed Request for Review of Major Procurement Contract Amendment [Exhibits H1 – H6] - Mr. Bishop Woosley, Director, DF&A Office of the Arkansas Lottery
I. Subcommittee’s Annual Report (draft) to the Arkansas Legislative Council (A.C.A. § 23-115-1101(d)) [Exhibit I]
J. Other Business
K. Adjournment
Documents
Speakers
Senator Joyce Elliott Chair
Unverified
Speaker 11
Speaker 14
Speaker 15
Senator Jimmy Hickey, Jr
Unverified
Speaker 19
Speaker 30
Speaker 54
Speaker 52
Senator Kim Hammer
Unverified
Speaker 77
Speaker 82
Speaker 22
Representative Fredrick J. Love
Unverified
Speaker 91
Speaker 81
Speaker 122
Speaker 128
Speaker 129
Speaker 134
Speaker 137
Representative Megan Godfrey
Unverified
Representative Vivian Flowers
Unverified
Speaker 175
Speaker 191
Representative Jeff Wardlaw
Unverified
Speaker 194
Speaker 186
Representative Johnny Rye
Unverified
Speaker 117