ALC-Lottery Oversight Subcommittee

You have any comments from my co chair okay okay it is the okay Mr Hagger you you're recognized. Thank you Mr we appreciate your time today I want to apologize for the shuffling of documents we had submitted last year's contracted you approved a year ago which was in the final extension on a contract with Camelot from the original contract that was signed I believe in twenty fifteen. We that responsibility rests with me I reviewed the packet that you receive and and did not catch the contract start looking like every other contract but I want to apologize to you we can do better and we will do better next time we appear before you'll have the documents the correct documents well in advance and I would apologize for that. Today we're we're here to discuss the proposed contract that the lottery would like to enter into and this is with the group Camelot Camelot first visited Arkansas I believe in twenty fourteen and did a study on behalf of legislature regarding lottery and subsequently entered into a contract with the lottery in twenty fifteen and there were various extensions to the contractors were exhausted. Ken what's been an integral part of the lottery operations and during my tenure having joined in August of twenty twenty. I took great advantage of having a commercial consultants on site to me a it was a resource that was unique in that most states the size of the Arkansas lottery don't enjoy I come from the consultancy world I've done that in the past and I understand that consultants are not permanent residents but by the same token a consultant that knows your business and knows it deep in well can provide value over and above what. Okay competing consulting could probably offer you. We're we're getting ready to embark on a rather exciting adventure the Arkansas lottery is is going to launch a second in state draw game. It's going to be called Lotto and it's a traditional lottery games many state lotteries offer this game you might ask yourself what is Arkansas need to second in state drug and the fact of the matter is is we have to balance our portfolio just saying a body politic has been privy to various bills and discussions regarding return return on sales and and we've we've effort it to increase the percentage return on sales and when you're doing that what you're trying to do is Ballinger game portfolio instantaneous have a margin of somewhere around on average twelve percent. A draw game has margins on average of about forty five percent so very quickly you can do the math and see that it would take the sale of for instance a concert to raise the same amount of net proceeds that one draw ticket will race. When you have one in state draw game you're limited other than your multi state games Powerball mega millions lucky for life which we also offer but those are games that are offered in other states and in and while we have some second tier winners and we've had one top prize winner I believe in power ball fact of the matter is is while our Kansans enjoy those games we want to be able to offer them games where they have an even better chance to win a significant jackpot. With natural state jackpot that game is a one dollar game it's sold only in Arkansas through Arkansas retailers. It's designed to roll in fifty thousand increments the beginning role is fifty and then it rolls it ten and five and but but the design of the game and that was our first in state draw game which was launched in twenty twelve so we've been at that game while now. The whole idea behind that game was to introduce our Kansans and lottery players to a draw game that didn't have a significant jackpot that was easy to play easy to understand and in was Arkansas's own and is is that game drove through the market place the lottery continue to engage in and research around that game of the game has done okay right now we're at a regular role on natural state jackpot it's odd that I'm sitting here discussing a second in state drugging with you and and and highlighting the limitations of the current game natural state jackpot but in a perfect storm here it is rolling at the highest it's ever role but that game typically is going to be hit somewhere before it gets to a half million dollars so while we're sitting there now that's that's that's that's new that's a new phenomenon and I could go into the reasons why it's done that and I think it's tied to a reduction in sales when you have less sales of tickets that jackpot numbers not gonna roll as quickly and so your your your jackpot is able to grow but what we noticed in the long term and when I joined one of the first things I did and some of you will remember I talked about how we were looking at margin analysis and how one of the reasons one of the reasons that we were opposed to a targeted mandate bill was because we believe that if we had access to all of the business levers all of the business levers available to the lottery that we could operate within business and economic cycles and we could develop a return that that was was sustainable and reasonable and was not artificial when I made the point during my testimony around that that proposed bill that you're essentially locking in my flapping you're leaving me only writer and I can't fly the plane and and so thankfully that bill was was put an interim study and did not pass it's given us time to move forward as a business operation I recognize. We're a state agency but also recognize we're self funded we don't receive a penny of taxpayer money so if we don't sell a lottery ticket during the year we all go home and and so that you know we have skin in the game as well when we started looking at the muscle games the the multi state games we're seeing a change now Powerball is exploring doing an international peace so we now would be our players in power ball would be competing with international players mega millions is discussing changes in their game lucky for life change their game a year ago eighteen months ago. But what we started seeing is is it's nice to be in these games and our players enjoy these games but we don't have any control is our Kansans over these games we don't have any control was a lottery over how these games run or later offered or marketed. And so we ask Canalys who are our commercial consultants through June thirtieth of this year if they would help us do an analysis and help us find ways where we can balance the portfolio and so as we started looking at the portfolio analysis what we came to see is is that there was room in the portfolio for another draw game and remember draw games produce higher margins to the lottery then instant tickets and that's important for net proceeds purposes and that's what fund scholarships so when we saw this gap in the portfolio I I test Camelot in my gaming department with. Design one or more games that you think would fill this gap and offer our Kansans an opportunity to enjoy another draw game different than the experiences they have in these other games and it'll be Arkansas's will only sell it in Arkansas and will play among our neighbors and will play among our peers and and they came back with law and so over the past year we've been researching Lotto and and I doubt any of you have been in our focus groups but it's not inconceivable that you would have been or someone in your family. We conducted a series of focus studies and and we went out and hired a third party to do interviews among current players prospective players and even people who say they don't want to play the lottery to see if if we can get some feedback on what might work for our Kansans and what we kept getting back was is they prefer features that were very similar to a lot of games which is a six number game with the bonus ball or a bonus number. and and and it our research further said that they would rather pay an additional dollar to have a higher jackpot role. So if we set the jackpot the minimum jackpot at two fifty two hundred fifty thousand dollars they would gladly pay two dollars and they would play that game and they would play that game alongside our other games it would not take away the lottery spend from the other gangs now we know that's easy to say in a focus group and we know that anytime you're offering competing products whether it's coke and diet coke you can say you can focus group that all day long and they'll say well it wouldn't change how many cokes up I'll just buy diet coke as well but the reality is is they'll be some shifting spent and we have to keep an eye on that because we do not want to cannibalize natural state jackpot that's our regional and state draw game that's our one dollar draw game that's a game where people can pay one dollar and and and contribute to scholarships with the chance to win a significant amount of money with Lotto your what you're doing is taking that experience you're doubling the price to two dollars per ticket but the the potential jackpot becomes greater. We all understand odds and we understand what that means but at the end of the day players want to choice and if you go to the same restaurant over and over and they never change the menu you stop going. And and if we keep offering the same thing over and over without any new additions or any variations people will stop playing and so this game is just a traditional lottery games there's nothing novel about the game other than it has a few features that are different for Arkansas such as a parimutuel feature so the more people that buy the game the higher the jackpot rolls and and and that's very similar to power ball and the multi state games so we try to take kind of a best of breed what to the multi state games offer that bring value to our players and how can we offer that in the state of Arkansas where we can control that game and we can market that game appropriately and we can do it responsibly and so as we started moving more and more towards this week we took this you know back to the department of finance and administration and we laid all of this out we showed on the economics and we said we believe based on our research that we can drive twelve million dollars in additional sales at least that's that's the floor we believe twelve million dollars in additional sales if we can get this game launched the appetite in the market place is there now and we're seeing some attrition in sales. They agreed. So then we had to come up with a strategy for how do we get this to market and we have to get this to market in a timely manner and so as we started looking at this and we look at the calendar it's not as easy as just saying we like this day we actually have to go to our vendors are central gaming vendor and all of our vendors that run our systems and say we are now going to add another game they have to create all of that within their software all of these recognition tools we had to get the marketing and we had to come up with point of sale materials and marketing materials we had to get to the advertising agency in Corpus something created. And as we started down this process we began to realize that Arkansas does not launch draw games frequently the last one was twenty twelve this is our second time of doing it we're going to have one chance to get this right are we are we sure that we have the ability with our staff and we have a staff of sixty five twenty two of those are in the field of sales rep so we operate very lean. Are we sufficiently staffed to launch this game at maximum value maximum launch value and and and and meet the targeted numbers that we think it'll generate and as we started looking around that we realized very quickly we're gonna need some help. It's not the kind of help that we need to have on our staff every year it's not the kind of help that we need Indefinitely but what it is is it's extra horsepower from a group that has launched games before that understands all the nuances of launching a new game who understands cannibalization of your existing portfolio and who have that the the the software and that the data analytics to actually manage that process and feed it back to us and say Hey you is what you're doing this and it's it's it's negative here it's positive here we think you should tweak this turn the knob up here and and as we started thinking about that we thought will who is who would be logical to help us over this next twelve months because game launch will be a twelve month launch and and and and you're going to you're going to measure the success of that game initially in what we call the halo effect so the launch however high you go it's going to create a halo effect you'll stay at a higher level the honeymoon level if you will longer with a solid launched and you will if you launch a new game everybody runs out and buys it there's no support on the game we don't get any data analytics back around the game and you see a dip back down. So really all you've done is is is you've had fun for a brief period of time we want to make sure this is sustainable and and we're trying to reduce our reliance on the multi state games and we're trying to give the power back to the lottery itself I and we think this is a way to do it when when we started talking with Camelot about that they were on their contract this year and they've been working on focus groups with us around this game they had done various financial modeling they had created matrices I had reached out to other states they really seem to understand exactly what we were doing and more importantly over the last seven years they've developed a knowledge and a familiarity with our systems so they know our system so if we change something here they understand the net effect on the other side. A different a new consultant to our agency for the purposes of a twelve month engagement. The ramp up would be ninety two hundred and twenty days so you're going to get about eight months of value out of that so what we decided was let's let's move for a one shot opportunity to make this game a success to deliver on what we are saying we can deliver and and and our best bet to do that is with the assistance of Camelot our initial thought was. We'll do it is a sole source who who better to help us then the group that helped us get this far help us design the game developed this concept we're ready to put out the market who better to help us than them. And and as we begin to research that and speak with with procurement we we understood that technically it it's not a sole source so we pulled that request and and we began to talk with them about the value that we believe we could get over the next twelve months with Camelot as a commercial consultant. And we we we crafted an agreement that is a special procurement it lasts for twelve months there are no extensions it's a twelve month engagement and the purpose behind the engagement is to help us launch our new in state draw game in September of this year. All Things. Considered and and also to ensure that these new draw game does not cannibalize existing games we we don't simply want to take money from my right pocket and put it in our left pocket this is designed to grow and and Camelot develop some financial models around this and came back to us and said. If you launch in September over that partial remainder of the fiscal year which ends June thirtieth we believe that your your sales of combined in its J. and and a lot of should be somewhere around twelve point eight million we picked that number. And we said you know if you can help us deliver that that is such a value to the people of the State of Arkansas and and would bring a real return to net proceeds and if we can drive the sale of draw tickets are return on sales that percentage return will go up. You're only gonna sell so many draw tickets in the state with three million people you have to figure out a way to maximize product the a margin and that's what you want to focus on and so while we offer something for everybody we we we are requesting the opportunity to keep Camelot engaged for a period of twelve months from July first twenty twenty two until June thirtieth of twenty twenty three and it that point. We believe the game will have have either succeeded or we we will see that we were wrong but regardless there services would not be needed for that purpose beyond that. I've already stated my opinion with regard the value that this this contract would bring I brought John Trenchard here with me John is the Arkansas resident project manager for Camelot and he's here to answer any of your questions as well regarding their unique capabilities or any such thing and I would also entertain any questions that you have. Information that the total value of this contract the maximum value is one point five million it's not guaranteed five hundred thousand is the guaranteed base there is a five hundred thousand dollar incentive that's based on the total performance of the lottery so it gives them skin in the game to keep an eye on the lottery total we did not want them to focus exclusively on the new game and natural state jackpot to the exclusion of our instigating everything else that we do so we tried to make it where they could instead we'd try to incentivize them in two ways will incentivize you if you help us grow lottery sales in general so above ninety million dollars your incentive kicks in. You also we're going to have the opportunity to earn a second incentive tier and that will be based a hundred percent around the sale of natural state jackpot and Lotto game so so what we see is the five hundred thousand dollar base is is what you're paying for their the they have their there is not just John spring chair but sitting in Arkansas are inter caste wealth who works with him they have a hole company and they have resources and they have things that we can lean back on the five hundred thousand dollar guarantees provides to these experts on the ground for a minimum of five hundred days numbers three sixty five a year but if you take two individuals to fifty per. So it's five hundred days at the end of thousand dollars a day. The first year is the ninety million dollars here we we we believe we will be ninety million next year we believe that but it's not guaranteed and so our theory was is if we paid ninety is where we think we could come and without your help did you will you should only be incentivized for anything over that. And they agreed and they did that and then the second incentive pieces also obvious that is if you're going to encourage us and and work with us to launch a second in state draw game then if that game is successful and if it does not impact our existing in state game did you will have an incentive to hear there too so the maximum value they can earns one point five million. I think that's a value I think when you when you look at that amount to spend verses the potential and it is potential but but we research this we were not these are numbers we made up if we can increase sales by twelve point eight million like we think we can that million and a half as a good spent that's a trade off we should be willing to make every time and I and I think at that point I've given you everything and we just entertain any questions that you have. Thank you Sir Senator Pitsch you're you're up. Thank you chairman of. Mr Hagler I guess one of the benefits of being here for eight years and being on this committee as I've been here quite a while I don't necessarily have a problem with what you're doing but if you look at this exhibit C. one item three says the new contract will be a special procurement contract for one year only and then you turn the page to the indented it says the state procurement and it has some letters and I talents and dark to print when the officer determines that an unusual or unique situation exists that makes the application of all requirements of competitive bidding competitive sealed bidding or competitive sealed proposals contrary to the public interest I think that's a pretty high threshold prove that it's in the public interest to go to a sole source no words I have no problem with the game I have no problem with chasing down a second game if you will in the creative notice in the engineering and research and development. But I've been here long enough were sole sourcing in this program was a really bad thing we went for or if welcome I'm a call at our beach that's what my work professional life calls request for bid or request for proposal. I need to know per the words in this thing how it's contrary to the public interest to not go for an RSVP this is to be pretty specific as we're talking about the lottery which comes with a. Cloak around it with a lot of people to make sure were. Accounting for every penny and when we go to one person and and I to agree that your person here on the thing on the day as here has done a great job for us I was part of the group that approved their five year deal in their extensions but I'm very my ears go up when I see we're not going to go for an R. F. P. we're not gonna spend dollars without let everybody better despite not them that has the issue is probably their competitors that have an issue but I think we need to really clearly define how that's in the. It would be contrary to the public interest if we didn't do an RFP so I need you to comment to the center I think reports are well taken and and I may have been in our full in my earlier comments we initially moved for a soul R. A. up sold procurement sole source that was rejected I understand and they then with but OPM reviewed our request and said we understand what you're trying to do it's a special procurement it's not a sole source because there are other people out here who could do what you're asking but you there are special circumstances around this that we believe would justify a special procurement and and and a big part of that is the resident knowledge a big part of that is is if we launch in September we have a very short window for the remainder that fiscal year to get our launch up and loading and so if we had to go to R. F. P. we're six eight months out in four six or eight months out game comes off calendar vendors will fill their spots for all of their upgrades that would accommodate this game they have other states they work with they would simply put us to the back of the line again in Arkansas might not see it second in state game into a fiscal twenty four B. on well that was the race to get to market and and I got that I'm not sure how that puts the public at as it says contrary to the public's interest other than the game might not be there I guess my second question is. For my seven of a year's oversight on lottery we had our of P. with an expert in play here as you documented do we not have them other than this one year deal and what's the say a year from now we don't have in our of P. is our intention to have a full R. F. P. going forward after this I don't I can't sit here today and tell you that will have a need for a commercial consultancy beyond this that that's I think that's yet to be determined but it's certainly not on my radar and I've been very Frank with Mr screen sharing Camelot about that so you think we have the internal to be the the experts in this I think we have I think over the last thirteen years lottery staff has developed an expertise both through hiring externally and organically developing it internally that as far as the day to day running of the lottery we have that we have that expertise where we work where we come up short is in special projects where we don't have the staff to to do what we call outsized lives and when you're talking about a new a new draw game it's easy to say we're gonna introduce new drugging but it's much harder than scrap a new instant ticket I mean are signage changes our our TV Ms are ticket vending machines have to change everything changes are software changes our our our random drawing machines have to be updated in changing this is a big left and and so we don't do this lightly we're not we're we're putting up good numbers we're not we're not looking to bet the farm we're looking to just grow to the next leg. And we in in so to go to R. F. P. to put an R. F. P. out for one year. You would have attracted the best one I agree and you should be a long term contract yesterday I just I'm I'm very uneasy about taking an expert in saying we're not going to have a long term contract with the experts and second I'm not sure we meet the threshold of the. And again I have to read it so I make sure contrary to the best of public interest in not doing that so that's my concern I understand I'm I'm not unmindful that I I drew the analogy internally but it's it's much like if you're going to go climb Everest and you have a sherpa guide in and he helps you determine what equipment you're going to need and he sits down and he helps you charge the path up the mountain there's various ways to go up the mountain he helps you pick that path he he tells you when you should stop for breaks where you should be at certain points along the the expedition and then. You turn around and say what we're gonna do this climb without you. I I'm not sure how prudent that is and so as we began to look to launch the game we recognized that they had another extension or had they been within a multi year term contract we would still do what we're doing and I think that's what was the deciding factor for me was is we're ready to climb Mount Everest these guys got us ready these guys helped us pack the pack these guys been up and down the mountain we haven't done a one time. Are we are we gonna be more successful with them going up the mountain with this are we going to be more successful going on our and I think that was really kind of the deciding factor was if we could I could I would not come in here and ask for a multi year and that's why when when OPM said we're denying the one year extension in their letter we didn't want that in my letter back to of the two chairs I specified that and said you know it's become pro forma it seems to me and that's going to stop that every time lottery issues a contract they put a renewal term and they're not all contract should have a renewal. And in this contract does not have a renewal term this is a twelve month contract that I don't believe any other consultancy would have actually been on especially when the maximum value of the contract is one point five. it but this was just we we came up a little short of getting the game launched under the current contract and but by the same token a lot of that is just calendar driven when can your vendors put you on the calendar when can your your vendors get this new game in the system how quickly can you get it to the machines how quickly can you get your point of sale materials and with them with Camelot it just all of that went away because they're already here they already know all of that and I think that was really what was in the public's best interest it was paying somebody to learn as for the first four months or get maximum value out of a twelve month contract with somebody who has seven years a resident college. I have no two point I agree well I I I we're we're good in government bids of drawing down to the lowest best provider in just saying we're gonna pick one in order to give a million five. Without putting it out to everybody I understand the four months wasted time et cetera but by the same token I wish we'd backed up six months Garner R. P. ready to go when this one ran out so that we could go to whatever we are the so it is a bidding process available to all who want to participate so yes I understand. Represented representative back you're recognized. Thank you Mr. So. With this contract. Intact that will it's going to go away July first two thousand twenty three yes. So that will comply then have been under contract with this four since the previous contract that we got was actually one twenty nine two thousand sixteen it they will have been with the lottery I believe for eight years if this contract is accepted at the end of the term it will be an eight year consultancy I talked to my my. I guess my concern that two things my concern is is that you why we wouldn't do that why this is not already done you know if I'd I do think you guys obviously you know the how did this to it's does seem like we should already have this done that was that's one of my concerns but the other using Mount Everest analogy yeah I'll the financial future doesn't look all that bright looks a little. Shaky right now so why are we rushing up Mount Everest when we got unstable weather conditions out there I mean I does look like. You know maybe September his question was what that's gonna look like from our from a financial standpoint yeah we're going full speed ahead with another game well I don't have to issues I think it in and we'll noted I think the idea behind the second in state draw game is is we're starting to see a little bit of a maturation within the lottery population when you start a lottery you generally are gonna start that on an instigating it's easy to understand people can see the ticket they can scratch the ticket feel the ticket as they do that over a period of time and again get a little deeper into the lottery gaming portfolio if you will the draw games are are not impose driven drug games or or numbers driven so people will either play their numbers their grand kids birthday or anniversary or something like that it's it's a different it's a different gaming prospect than walking in and buying an instant check and scratching it and determining immediately whether or not you win or lose and remember part of our statutory mandate is is we're supposed to raise net proceeds in a responsible manner so what we're trying to do here and it'll take years to do this this is going to be an overnight deal but we're trying to right now Arkansas such a heavy instance state that the instance R. eighty two percent of all of our sales. And and by my estimation that's too high and you know it we we need more balance out of that and the only way we're going to get balance out of that is if we offer product it bounces and so I it's not a perfect time to launch a new game by the same token we we have fully developed the game to the point that you have to ask yourself do we simply put this on the shelf and wait for better economic conditions or do we go ahead and roll the game and try to create some excitement around a lottery even even in the throes of declining sales if something's new you're going to be more likely to go look you know when when the new Bronco came out you know I didn't go look at the new F. one fifty I've seen but when that Bronco came out I went looked at. And I didn't buy it to my son's chagrin but but I went look because it was new and it was novel and it was exciting and I wanna go check it out I didn't care about the one fifty seven at the other end a lot I saw them the year before so I think that's really where we decided let's go ahead and push this thing out with regard to the R. F. peas I take full responsibility for that I come from the private sector that's no excuse but the fact of the matter is is I hate. The or if the procurement system in state government is not easily learn to me it's almost like a foreign language and when I am when I joined and I looked at at the RFP process and I to coming out of the private sector have done request for proposals and whatnot but the RFP process within state government is a completely different animal if they speak a language that I'm still learning but it but I guess I better go back to this and and and and and and and in fairness of defense. I'm not sure I could have supported a multi year R. F. P. for this purpose. I I I I think this is a one year engagement it's a new game they're going to help us launch the game monitor the game integrate the game and they're going to monitor the rest of the portfolio. Lottery will have other initiatives going forward over the years and there may be a time that we're back in here and and we're asking for permission to issue an RFP and and and asking to go back out to the street and and ask for bids on a commercial consultancy that that could easily happen but I think we will we try not the plan I don't want lottery senior management to feel as if the R. F. peas or a crutch for trying to to improve ourselves for trying to do what we can internally there's no greater satisfaction than doing it yourself and why you always appreciate learning from somebody with more knowledge and more resources or more experience you have you know there's always you know that that first solo flight without an instructor and I think that that it's important that at some point from you know it would be it staff has to figure out that they have the ability they have the knowledge and and and and they have the tools to get the job done and if they can if they can satisfy themselves that they are masters of their universe than that allows me is the executive director to chart the next leg of growth up and and and push them push them outside their comfort zone somewhat but then you have to provide the tools around that and when you're talking about growth and new initiatives we don't want to carry that kind of staff is an expense of the lottery upon ongoing basis so we will be tapping on consultants going forward and we hope the Camelot you know chooses to bid on some of those but as I sit here today I don't have any in my you know we an R. F. P. around I lottery but I lotteries really not something that we're focusing on right now we're focusing on a new and state troll game we're we're enhancing the up features around our mobile apps stock going to be a lottery you're not gonna be able to buy tickets off your app and play on the app yet that that may come some day but it's not for today and the reason it's not for today is because. In my judgment or not ready yet but we're getting there and so we'll come back in measured steps but I certainly have learned a lot about or if the and I don't expect to be back in here again with one year contracts on on a regular basis but I felt like this particular one I can honestly felt very lucky the Camelot was willing to bet on this and this was a negotiation this this you know as I said to John when we walked in here and sat down and he said I haven't seen you in a couple days now said you know we didn't go shape this over beers this was negotiated and I think in fairness John we had some tough discussions and but but but I value the services they provide all I can do is use my best professional judgment look in the eye and tell you I think this is what's best and it's based not on my opinion but on the data that's crossed my desk. Representative right to recognize. Thank you Mr chairman I got a couple of questions first of all I understand why you're bringing this here today and I appreciate the level of detail that you've gone into to explain it I'm looking at the letter from transformation and shared services and. I know you mentioned only needing this for for twelve months and you didn't want the option to renew but it says here that you'd ask for twelve months with the option to renew so if the scope of work is just for twelve months why did you initially ask for the option to renew well I can explain that in again is executive director the Buck stops with me our procurement coordinator was promoted internally the lottery did not have a procurement coordinator when I joined a relied entirely on the FAA and other agencies helping it go through its procurement process it had won in the past in that position had gone away and and I I approached DFA with the request to recreate that position for this very reason so that we don't run into a situation where we don't have R. F. peas to street when we should where we know that we're we're jumping through the hoops the right way the gentleman that that accepted that position was a procurement officer in the United States Air Force for twenty five years and so I'm very comfortable and confident that he will master the process interestingly and I have asked internally and I just I didn't get a direct answer because that I've made heirs myself and I asked how did this one year extension request even come about we've never talked about that. We never talked about I never saw this is anything beyond one year. And he said I made a mistake every contract I've reviewed since I've been in this position I noticed had. Extensions and I just thought that the as a matter of pro forma that's the way it was supposed to be and I said you know. I understand you made an error but so did not because I signed a letter which means I read the letter now mayor reddit for the afternoon and maybe I wasn't as sharp as I should have been but that's no excuse and so expressed of senator Caldwell this morning or this afternoon earlier this and I'm I apologize this this week we appear to be at loose ends here and and and I have to own that process so that it was simply a miscommunication within my own department okay thank you for that response you the other thing I want to ask about as you sort of compared the running of the lottery to running a business and yes manage and you mention that the agency is developed the internal expertise such as that it may not be necessary to have another long term consultant does if that's the case does the does the lottery have a five year business plan for example we do we have a five year business plan that Camelot helped assist in in drafting There's no doubt that if the lottery or the legislature or the powers that be determined that the lottery needed to move forward with an I. lottery platform that that is that that's an instance where we would we would issue an RFP that would be a multi year term contract and that would be we would be looking for expertise over and above what we have on staff we're not at that point right. Okay thank you thank you Mr thank you Sir. Are there any other questions Senator Rice you're recognized a dish. Say from Committee Amin when I came into legislation two thousand nine that's kind of patted on the head I will miss Porter lottery idea and and said you know we part got this worked out is the set center and we're going it's gonna be all right and as I said through the committees and all been through the extensions and bonuses and many things to so I've kind of morphed in some of my thoughts even though I would not be explored water I do believe in the the business plan that we talked about you mention you have to have a business plan we discussed today or before and I do think we're probably looking at a very good possibility of two years tough road ahead in in that in one thank you talked about our awareness it in my retail business the that's the bottom line you've got to have our awareness and you gotta have some expertise sometime relation people's knowledge and good idea that's when you do need so additional say up front I'm I'm in support of this were and other times I might be question you know we should would got that Kerman that thanks to the other side where we're at now is just fine I do appreciate the detail you with them on that but I I think we've got some challenges ahead partial going to do some things right to keep this saying bring in money and for what it was meant to be not just Arkansas have a lottery to bring in money for or for the educations thank you for your your prescription today thanks Sir. Service call will. Thank you Mr chairman I want to reiterate represent ready what you ask about the your extension we met back room in the new hand that we passed out the if we have a motion to accepted contract it would be without the one year extension so just to make that clear of the with procurement. With bill or other good with his contract that it would be a twelve month contract with no extension. Thank you Mr. Any other questions. You have a motion to accept the contract. Which motion. The second. All in favor say aye. Any opposed. Thank you John appreciate y'all thank you all. I'm. There's no other business were German.