ALC-Lottery Oversight Subcommittee
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- October 2, 2026
Senator Ricky Hill
Unverified
6:25
you ready let's call the meeting to order have a great crowd today so hopefully we'll get some good information have some good questions and get everyone's questions answered so we'll move forward with this Mr cohair is there anything that you'd like to add to it thank you well first off we're gonna review the intralot and scientific games contracts uhrector Strong
and misre Mr Secretaryhudson's gonna come up and join us please introduce yourself for the records
Senator Ricky Hill
Unverified
7:03
have a motion to review have a motion in a second all those in favor say
aye opposed same sign go ahead right good afternoon Mr. Chairman Jim Hudson secretary of
Speaker 11
7:20
DFfa I'm not in your committee that often so it's good to be here today thank you for having me
Speaker 13
7:29
Sharon Strong executive director of the lottery thank you for having us proceed Mr Chairman
Speaker 15
7:35
if I can just go ahead and open up I'll I'll let Sharon kind of get into the details of the contract she she
Speaker 16
7:40
did you know all the heavy lifting on the negotiations on this I kinda wanna give you a little bit of the backstory in terms of how we kind of got to where we are today uhharron joined the team a little over a year ago last summer a year ago summer and one of the first things that I asked her to take a look at was the lottery contracts I knew
they were coming up for renewal in the summer of 2026 and and to be honest with you I felt like we weren't quite getting all the value we could get out of those contracts. I felt like there was certain parts that we were probably overpaying on and also had concern you know particularly on our central gaming system which is you know the the system that issues the tickets for like Powerball Megamillions it's a little long in the tooth and I wanna make sure that we're not working off of a 1015te year old technology
and and really having some assurances about forwardlooking capital investment to make sure we're refreshing the technology on a regular basis and so as we began to talk about a process for procurement one of the things that I felt like just in terms of negotiating that you know I wanted to maximize the opportunity for leverage that we had with the vendors and is there an opportunity to kind of start talking to the existing vendors about you know renewing the contracts albeit on a more favorable terms
so we examined our authorities that we have under statute and under the lottery's rules about procurement and we believe that we have the opportunity if the the quality of the deal came back such that it was a much better deal that we can enter some direct negotiations and if they didn't prove out then we would just kind of do a more traditional procurement and you know do it you know conventional sort of bid process so we started the conversations with the vendors and really there's two vendors here two contracts you'll be looking at one is the central gaming
system with introott and again that not only issues the tickets but it's kind of our our backbone our back office for all the accounting as it relates to sales of of the lottery tickets both the instant tickets in terms of scratch off in the draw tickets the power you know, owerball megaills things like that and so the the initial responses back from the vendors were encouraging but they weren't quite what we wanted them to be yet and so uhharron and her team
went through a series of negotiations back and forth asking for more getting some responses asking for more and it's a process that really has gone on for the past several months. I will tell you and just in terms of Secretary DFfa being a part of the Arkansas forward project where we're looking at procurement very very closely I think we have a tendency in state government to be very process oriented and process is important. I believe it's important.
but we don't score value we think if we follow a process to the te irrespective of the the business deal the the quality of the terms that we've actually accomplished something and I've seen way too many contracts come through and you've seen way too many contracts come through where we spent a lot of time and effort just to agree we're going to pay a whole lot more money next time. that's not how you run your businesses that's not how I ran business when I was in the private sector. you know we are a big purchaser
the lottery is a large enterprise. we need to leverage our buying power to get the best deal possible and whatever money we can save with the lottery drops 100% to the bottom line and that is 100% going towards scholarships she gets no cut off that she's already fully paid so any savings that we get goes toward scholarships and I'll let her unpack the details but here's the here's the headline
on it through the negotiations that we went through with both intraott and with scientific games the value of the contracts going forward the improvements the economic concessions coming back to the state about50 million dollars about 10 million of that is actual cash right and this is not funny you know government accounting this is we're paying actually that much less over the life of the contract back to that Cap xxx I was
talking about earlier we're doubling the number of vending machines that we have available I don't know about you right now if you want to be able to buy a lottery ticket and and you know full disclosure I don't buy lottery tickets just personal deal with me. I'm not going to do that but for those who want to do that you have to use cash who carries cash ? Nobody carries cash and if you're like me you know sometimes you just don't want to go in and talk to a human being you won't be able to do selfservice when I go to circle K you know, I'm at the pump, I
pay at the pump and I leave. I don't go inside to talk to somebody to do business it's even self checkout from getting diet coke as well so we're upgrading the technology with those machines as well where you use debit cards you don't use credit cards but you use debit cards and you'll be able to buy your lottery tickets through a vending machine doubling the number of vending machines not on our nickel that's on the vendor's nickel they're paying for it OK? and we're getting some upgrades to the the terminals as well so
really great value. I'm excited about this because again we spend a lot of money in the state of Arkansas. I don't see enough deals come across my desk where're like wow that's actually a good deal this is a good deal and I'm very excited about it. I'll just turn it over toharron now to kind of unpack the details and then happy to answer any questions that the committee has. I want to ask you one question you
Senator Ricky Hill
Unverified
13:34
mentioned50 million just then was over the life of the contract are you figuring the extension on the contact if we already do it or how many years do you think that I think that's the 10
Speaker 11
13:41
and 80 year contract term so 10 years would be5 million a year roughly.
I'm not sure if it breaks down evenly per year but I think over the life it's it's that for intraott I think it's about a million
Speaker 27
13:53
dollars for intralot we had about3.5 million over
Speaker 28
13:57
the contract term. million you you see where I'm going I'm just trying to break it down into a per year basis because you can
Senator Ricky Hill
Unverified
14:04
throw a number out there it looks really big but if you divide it it's not near as big so I just want to kind of clarify that there's some
Speaker 35
14:16
it's difficult do you mind pulling that mic a little closer? I
Speaker 36
14:21
think some people are having a hard time so these these contracts are based on sales and so you know if we do well and we sell a lot, then the the payment that we make to the vendor of course will be more or less if we don't do as well each year so it's it's hard to determine, you know a on a per year basis but we do we do a decent job forecasting and budgeting and and we can get into that we'll get into that agenda item C I
Representative John P. Carr
Unverified
14:48
believe when we get to this report so it's it's percentage of sales so it's paying for performance and we built the pro formas you know for those numbers based off actual 20 fiscal fiscal year 2025 numbers we had to have some baseline to be able to use and figure let's just use the last year you know if we do better this year and we're trending better so far then we may end up paying more in fees but the savings then would be more compared to what we'd otherwise pay in the existing contracts thank you good question
Speaker 28
15:19
So thank you Secretaryhudson. So you know, I think I say this all the time the lottery's a square
Speaker 40
15:25
peg in a round hole because we are a business and we're very focused and concerned
Speaker 36
15:33
about that bottom line. and the mission is to maximize revenue for scholarships. So all of our revenue goes directly to that that pot of money for the scholarships. and what we learned early on in the process was that the states
that were going out to a you know, sort of a strict RfP process. Their costs were were being driven up versus the states that were renegotiating their current contracts with their vendors they were able to leverage and negotiate a better rate and we got some data from various states on that and then we utilized an industry expert to confirm that data for us and help us to craft a counterproposal to the one that we had gotten from our current vendor and and so and so through that
process we ended up like Secretary Hudson said with a much better rate and also the vendor providing a very significant amount of capital expenditure investment on the front end of the contract. So, um, just to give some details some numbers on the interlock contract, the current rate that we have is 2.11 and you know it percent2.11% of our sales
and then on the proposed contract the rate will be reduced to 2.05%. which is about a3.5 million dollar savings if you use our fiscal year 25 sales numbers additionally they are going to set aside $2 million in investment for what we mutually determine as something that will be beneficial you know whether that is new equipment whether that's
research, whether that's if we obtain a new partner a new retailer partner. we have $2 million that we can use for whatever comes along the way and over the over the lifetime of the contract in addition to that they will provide complete upgrades to our system software and technology as well as fully updated hardware and equipment upgrades throughout the state at both our headquarters and all of our retail partners. So that's all new terminals, all new ticket
checkers, all new signs some monitors and then the software the back office system software will be completely updated and upgraded so that's I don't have a a a
Speaker 26
18:09
figure of what that is but it's very significant capital investment that they'll have to make
Speaker 36
18:14
on the front end which is why the term of the contract is what it is so that over the lifetime of the contract they'll be able to recoup that investment
moving on to the yammes numbers we we restructured that so we had a base rate with them and then when they hit a certain number they were they received a bonus payout so we restructured all of that completely. The point at which they received the bonus is much higher than it was before it went from360 million to480 million. and then also they run our loyalty program which we've had for years and the the rate that we pay them on that was reduced
Speaker 42
19:00
as well. can we stop there and just make sure that the committee understands the significance of the restructuring of the bonus you know
Speaker 43
19:07
most years we're gonna hit that360 right just based on our history of sales so when I was in the private sector you know get a bonus in
Speaker 44
19:15
government work shouldn't get a bonus in government work but when in our private sector you get paid a bonus for stretching you
Speaker 16
19:21
get paid a bonus for overachieving and you know I think the current reality was we were bonusing before we really overachieve him
so we're pushing that number up to that480 before we start paying a bonus and I'm good with that I mean if they help us actually do better and increase our sales that's worthy of a bonus you know I think the previous
Speaker 15
19:42
you know con the current contract did not really incentivize enough growth in the business the new contract incentivizes growth in the business and I think that's very important sorry to interrupt would would would you
Senator Ricky Hill
Unverified
19:51
kind of elaborate just a little bit on the bonus what what what is the bonus the percentage that's paid out increases and
Speaker 26
20:01
she has that increase so it was for it was
Speaker 36
20:07
an additional4.5% on top of the base rate now in the new proposed contract it's going to be an additional it's a tiered system based on our sales so it'll range from615 to2.365 based on the sale. So just to give you a sort of a apples apples comparison under the current contract if we sell520 million one year
versus under the new contract if we sell520 million we will save3 million dollars under the new proposed terms versus the current terms. thank you and so you're
Speaker 19
20:47
really you're self funding you know the bonus through the incremental in in the sales and we're only paying the bonus
Speaker 42
20:53
on the increment not on the whole wholesales volume. So
Speaker 28
21:09
what questions do you all have I guess so you're ready for questions feel like've covered kind of the the basics and I'm happy to take questions. ener hammer we'll start with
Senator Ricky Hill
Unverified
21:22
you no sir because you'll think of more questions if you go ahead and go now that's why I wanna be last Representative Collins
Representative Andrew Collins
Unverified
21:44
thank you Mr Chair. So I I think before we even get into the contract, my first question for you is how is it that you can do these these are
not competitively bid right? I mean that's accurate to say that well no I think
Representative John P. Carr
Unverified
21:57
it is competitively bidden in the sense that we received a competitive bid if you're asking the question did multiple people submit proposals for the services? No, most people didn't
Speaker 44
22:05
we did direct negotiations with the incumbent vendors will you'd agree I think that a bid is a little bit different
Representative Andrew Collins
Unverified
22:14
in the procurement context than a proposal, right? I mean we're not
talking about competitive bids in a well state
Speaker 44
22:20
negotiated agreement state procurement law actually can use bids and proposals somewhat interchangeably particularly when you're talking about the map process a proposal essentially is a bid typically in state procurement law bid is like a sealed
Speaker 42
22:31
bid and that's certainly not what we did here well let me get to my my point and then you can
Representative Andrew Collins
Unverified
22:37
tell me if if you think that this means bid in this way. so I'm looking at the statute
because I was interested in doing and how y'all did this and I recognize that you have your own rules here but you also have some statutory requirements that you have to comply with and I'm looking at 23115701 which is you know your procurement statute and in C2 it says the office meaning you guys shall arrange for the solicitation and receipt of competitive bids for major procurement contracts so I understand you have your own rules and those governed but
those rules are subject to statute and that I don't really understand how you get around that part of statute to do a noncompetitively bid contract for a major procurement contract. So maybe just tell me why you think
Representative John P. Carr
Unverified
23:31
we can do that so if you look at that statutory language it's it's very very brief you compare that
Speaker 44
23:38
language to state procurement law where the statutes themselves
have very detailed procedures that the aggencies must follow in the procurement process not so in the lotteries the lottery for for reasons that I don't, I wasn't here for, wasn't a part of that process the general assembly chose to write that language in a very brief fashion and then simultaneously conferred rulemaking authority upon the lottery to essentially fill in the gaps on that which is what they did they went through the administrative procedures processRay wrote the rules public comment they brought them
here and they went through the ALc review process these are not new rules these rules have been in place for many years and have been used in previous procurements
Representative John P. Carr
Unverified
24:27
as well all we're doing is following the path that's been
Representative Andrew Collins
Unverified
24:30
followed before. I understand that you have the rules to flesh out the
details. I totally get that and I understand those rules predate all this how there's only three things that that says one is that y'all shall adopt rules wo is that it shall be competitively bid so I
I mean I I just don't see the rules are subject again to the law and the law says that the office shall arrange for the solicitation and receipt of competitive bids for major procurement contracts so I'm just not I'm just not seeing how you don't have to
Speaker 34
25:05
have competitive bids for major procurement so the exception to comply with state
Speaker 36
25:12
procurement law is as you stated in sectionsc and D C1 says the
the office shall adopt rules concerning procurement for major procurement contracts and major procurement contracts is defined in our roles as a contract that is75,000 dollars or more and a specific to lottery and it lists a few things including a central gaming system and a ticket printing service. So these would fall under what's defined as major procurement contracts . and then if you go to C2, the office shall arrange for the solicitation and receipt of competitive bids
for major procurement contracts. solicitation is defined as um, basically putting something out there asking for a response and then major procurement contracts as I stated is also defined in our rules but the word competitive bid is not defined and so that needs to be read not in in terms of the definition I think that you're thinking of as a competitive so in in in state procurement law competitive bid
is something that is 20,000 to75,000 dollars or from $20,000 to75,000 dollars and you get three quotes. and then but but major procurement contract and lottery world is75,000 or more and is a is a specific thing to lottery so those two things are conflicting in that one sentence. So that can't what it's when it says receipt of competitive bids basically the way that I think what that means is the office shall arrange for
putting something out there saying we want an offer and then we receive that offer for this major procurement contract which is75,000 or more and specific to lottery and I'll I'll stop and let other people come
Representative Andrew Collins
Unverified
27:07
in. I have no issue with the threshold. I understand that's different you know and you can define that how you want but you can't define competitive bidding in rules in a way that's inconsistent with what competitive bidding means it's not defined in the statute sir but it doesn't have to be. I
mean it it means something unless I mean if you guys are saying competitive bidding means negotiated contract OK I mean I guess that's a position but I I just find that hard I I can't get there because competitive bidding why even have this language in there if it means it could be
Speaker 43
27:42
a negotiated contract but but again I would I would argue that if you compare it to
Speaker 16
27:48
state procurement law there are numerous sections that elaborate on all the processes including a direct negotiation process allowed understate procurement
law. This is just a very short succinct statement in code coupled with a grant of rulemaking authority the agency is entitled to rely upon rules that are validly promulgated that had been reviewed by this body and set on the books today and so to say and and had been followed and we have precedent for we followed previously other procurements as well and so I just find it curious that you know, now we're saying that well maybe we shouldn't rely on rules that have already been approved they're there
they're on the books if we don't like those rules then there are processes for changing them but as long as they're there the agency's entitled to rely upon to the benefit
Speaker 44
28:35
of the taxpayers which is what we're doing here unless they're inconsistent with statute but thank you that's for a court to determine but this is you know rules are presumed to be valid unless found otherwise and they have not been found to be otherwise Representative Halt . thank you Mr Chair. thank you Secretary Hudson. I I've
Representative RJ Hawk
Unverified
28:59
I've got some the same questions kind of along the line you know you said earlier that you're doing what's best for the kids and the and the scholarships and
and and I agree with that I'm not discounting that but what I would also say though is wouldn't you agree that we would competitively bid this out to other vendors across the country that might do this to say let's figure out what we've got to figure out
what the best deal is rather than just going with the same two that we've been using for however long now
Representative John P. Carr
Unverified
29:30
well let me take a crack at then you go next we're not buying reams of paper we're not
Speaker 44
29:36
buying paper clips. there may be one vendor in the country that can do this other than the two that are currently doing the services so it's a very thin market to begin with and that honestly was the was the principle that we kind of focused on if if we could somehow catalyze competition and we had multiple vendors
Speaker 16
29:55
out there absolutely you know do that and gives many people the table as possible but if there
are only three in the country and 2 of them, you currently have contracts with what are you really going to accomplish with that particularly with the intelligence that we have on the third vendor in terms of they're probably not gonna come back with something that's gonna be cheaper anyway so the ability to say we're going to talk to you directly and you have an opportunity to convince us that the business case is better to negre directly negotiate the versus going out to an rfP you show us that it's a better deal for us and if it is then we'll do the negotiations. If it's not then we'll do the other thing and
then simultaneously have a thirdparty expert who's not beholden to us who doesn't work for any of the vendors go out and do the data you know, research on this and tell us what are other states paying you know are we at least getting something as good at as
Speaker 27
30:46
if not better. And I think the data came back that we got a good deal on
Speaker 40
30:52
this and I would add that but like I was saying before that how a lottery lottery is a square peg in a round hole. So in normal state government world, you know we rely on this
RfP process to get us the best deal, you know, put it all out there free market economy
Speaker 36
31:10
competition drives costs down all of that. It's counterintuitive but that's not really how it works in the lottery because this industry is so small and there are only3 companies in the entire world, not just the nation but the world that can provide these specialized services and so putting it out to RfP does drive up costs and that's exactly what the data showed. The states that did go out to RfP recently, their costs were driven up
anywhere from 13 to38%, whereas ours went down and so it it might seem counterintuitive but that isn't the best way to get to and and back to the to the law and the statute where it talks about I am required to make sure that any contract that I sign must be must provide the greatest long term benefit to the state. The greatest integrity for the
office and the best service and products for the public and have the objective of raising net proceeds for the benefits of scholarships and grants so I don't want to lose for the the the forest for the trees here overall I am statutorily
Speaker 82
32:20
required to achieve this this end goal here p re s ent ative hawk also
Representative John P. Carr
Unverified
32:27
I think you know I'd say that we've we've all you know, been around the block here a few times.
Speaker 44
32:32
We know how this this works in terms of procurement if a particular vendor felt like
something was kind of sketchy that was going on and they're getting boxed out of the process in unfair fashion. we all know what happens you know my phone rings your phone rings this is not fair we need to kind of get let us get a chance to bid on this nobodyboddy's you know saying hey I want to get in on this process because again it's such a thin market and and keep in mind too these are all proprietary systems so it's not like you know we bring in a new vendor and they would run intralot system with intralot's boxes they're gonna rip all those out and they're gonna put
their boxes in and so the cost of conversion on that and the loss of sales falls to the Arkansas taxpayers so we're taking risk off the table by doing it
Speaker 16
33:17
this way and I think for the from the ve nd or ' s perspective this is the good part of the negotiation they get you know some assurances they've got that revenue stream in the future we're making them pay for that so
Speaker 10
33:30
you get the revenue stream we're gonna pay less. so there's there's market dynamics that are occurring here as well and I think you kind
Representative RJ Hawk
Unverified
33:36
of led me into my next question and it's my
understanding and and you guys are the experts in this and I'm just I'm asking questions here but that one or
either both of these can handle both these two contracts, right? Have we ever looked at even and going kind of back to that competitive bid and I don't know how well I guess it was 10 years ago when this was done or so
have we ever even looked at saying intralot or scientific games or thirdperson company, could you give us more of a cost savings if you handled both
things rather than having two separate contracts that's a good
Speaker 89
34:14
question it's a fair question you know, I think back to the point it's a thin
Speaker 44
34:19
market so we don't have a lot of alternative vendors out there so I want you to think about concentrating all your eggs in one basket and companies fail all the time and right now we have diversification of our revenue stream so if for whatever reason intralot is struggling in its performance particularly on the on the draw games. you know we've got the scratchoff tickets there that are compensating for
it if you have that with one vendor and they're just going through a rough patch and they're failing to execute all revenue lines are affected by that. So I think from us from our standpoint irrespective of who the vendor is we want to have multiple vendors in place there just to hedge our risk a little
Representative RJ Hawk
Unverified
34:58
bit. So to that point then rather like why why would we do a 10 year contract instead of like let's say
a7 or 80 year con because if they're failing and we're stuck with them for 10 years. I mean we're not stuck
Speaker 44
35:13
with anybody so we've got out in this so we havesAs in in in place so that if they failed to perform in the contract they're gone so that's not the issue having a longer tail on the contract gives them again that revenue assurance over a period of time so they can recoup their capital investment so
Speaker 16
35:31
you know we could say you know shorter contract they take off the table then paying for the equipment so we've got to take our cash to pay for the equipment. Well now what we're saying is we'll give you a
Speaker 10
35:43
little bit longer in the contract but we're going to make you pay for it. Pay for it by giving us equipment on your nickel not on our nickel. thank you ent
Senator Kim Hammer
Unverified
35:54
tra ha m m er we're back to you thank you for share to that question right there so who's paying for the equipment now are we paying for the equipment under the current contract Well I'd say that it's fairly stale equipment but we're paying for it we're paying for it OK. and when you talk about the
savings define the source of the savings is it through the extended contract is it through increased sales because because something that was said it puts more incentive on them because they're going to be putting more machines in which that either means that you know what
Speaker 44
36:31
the the the the savings are are really just kind of projected based on last year's sales I believe that you know the quality of the contract we're going to see an increase in sales so we're going to get more
savings we didn't want to kind of gild the lily in the presentation so we left that out we're just strictly comparing to last year if we did no more than last year that's the amount of savings that we're gonna have and that's a savings that is calculated by how much we're paying the vendor to do the work we're going to pay them less their commission is less than what it is right now but the tradeoff for
Senator Kim Hammer
Unverified
37:07
that is they get a longer contract which secures them as long as they perform and we don't have to get rid of them they've had the contract since
Speaker 28
37:17
2009. so it's not any longer than it was
Senator Kim Hammer
Unverified
37:20
previously so well that was one of the current contract the what's the length of the current contractor're under right now is it 8 or 10 years what is ve
Speaker 101
37:30
years it's been extended multiple times so the current one I don't , I honestly
Speaker 36
37:35
don't even know it it it was implemented in 2009 and then it was extended multiple times
but it expires in August of 2026. and there are no other extensions for that
Senator Kim Hammer
Unverified
37:56
one so is the intent of doing it now instead of 10 months from now to give them greater lead time to get the transition of the equipment
Speaker 36
38:05
in place or the conversion time takes about a year to build and upgrade all of the software and all of the equipment. We are already a little bit behind because we're
about the 10 month mark. so that's why we need it to be reviewed now so because the company's not going to start investing these capital expenditures until they know that this is obviously that
Speaker 26
38:30
this has been reviewed or and and we're set to go that's
Representative John P. Carr
Unverified
38:33
a really good but it's a it's a good point I wouldn't go wouldn't blow past that to the extent
Speaker 44
38:39
that we don't move forward in the new contract we'll have to find some mechanism to extend the current contract which
Representative John P. Carr
Unverified
38:45
means which means we'll overpay for a while longer which will mean
less you know money going into scholarship and and so I guess then the
Senator Kim Hammer
Unverified
38:55
question is we're now up against the wall and if we've known that this has been coming for a while how long has this been in negotiation from the beginning of the negotiations to where we are sitting here today well it's been a back and forth process over
several months. and was there any was there a reason
not to start sooner than later given the fact that we
knew that we're out of extensions right on the original contractor we out of extensions you know I'd argue
Speaker 44
39:25
that we shouldn't be extending the original contract at this point it's it's it's a bad business decision and I'm sure it's the it's even an appropriate decision at this point but we're out we're out
Senator Kim Hammer
Unverified
39:34
of that option of extension without paying a price I mean
Speaker 16
39:37
no if if you know again if we're not able to move forward on the new contract we have to have a contract in place because we can't turn the lottery off so we'll have to have a mechanism for continuing to pay these people under their existing
terms and conditions and I'd argue overpaying these folks . Senator, I'm very happy with the pace that the team went through in terms of negotiation it just takes what it takes you know we're 9 months away roughly from it. you know we need to move fast but I do think we have enough time to get it done the and and I think you
Senator Kim Hammer
Unverified
40:09
hit this issue but let me emphasize it again or give a chance to emphasize again what there were no
the other company how many other companies could actually perform this work one other one other one which has been the debate for a long time because I'm remembering a committee meeting like4 or5 years ago where the issue is not everybody in the world does this kind of business. you're very thin on who you can pick from so the other company when when they it became apparent that y'all were coming for us today for you know, approval to award this contract there was no formal notification in
writing anything from them saying that we've been unfairly eliminated from the competition. It's a
Speaker 44
40:56
small community and if somebody interested in pursuing this business we would have heard from them. We have not heard from them. but but on
Senator Kim Hammer
Unverified
41:04
the record there's been no complaint from them because what I'd hate to see is us award this out of here today and then they come up later and say well hey we were unfairly excluded from the process we've been in that situation before and to this state they haven't
Representative John P. Carr
Unverified
41:22
done that again nobody's unfairly excluded, you know and under take note of Representative Collins's exception to you know our approach on it but we believe that the approach that we're doing is we're not pushing the envelope black letter, it's in the rules it's
Speaker 27
41:35
part of what the law that we operate under and we think it's a valid process and a fair process too right two other quick questions if there is
Senator Kim Hammer
Unverified
41:44
another vendor out there that is capable of doing the work
did you afford them the opportunity to bid on it were they officially notified in any capacity that this is coming up and they were officially notified that they could enter into negotiations to try to get this contract. Again, I
Representative John P. Carr
Unverified
42:08
think our approach was the best way to achieve the savings that we wanted to achieve on this was
Speaker 44
42:14
direct negotiation with the incumbent vendors because to switch out vendors you know creates risk and operational
costs for us that would be a concern so you know
Representative John P. Carr
Unverified
42:26
we know we did did we go out and put an ad in the paper saying that you know, please send us a bid
Speaker 44
42:31
on this. No because it's just one other company that could potentially do that and we don't believe that
Senator Kim Hammer
Unverified
42:38
they would provide a cheaper bid on this and how can you classify it as a competitive bid if they weren't allowed to enter into the arena to bid if you if you did not do anything official other than it was your personal decision and I'm not saying un necessarily disagree. I'm just trying to
think through the process if you're gonna say it's a competitive bid there was somebody else out there that could have competed for it but they were not officially notified, weren't invited. you you guys just said hey you know what we think we can get a better deal with where we are how can you classify it as a competitive bid then because we followed the rules which would be the debate from the other side over there as far
Representative John P. Carr
Unverified
43:17
as it's not a debate though sir it's it's just not a debate. I mean the rules are approved and the agency is
entitled to rely on rules that have been validly promulgated and we should all be very concerned if an agency
Senator Kim Hammer
Unverified
43:33
can't do that right that's fine then our then our view would be or potential view would be we need to go back and look at the rule so down the road there would be a clear understanding or clear understanding of that which that'll be a future debate won't be settled in here today but
Representative John P. Carr
Unverified
43:49
there'd be a session conversation that's how you that's how the general assembly expresses its view on things is through legislation right last
Senator Kim Hammer
Unverified
43:57
question who determined the length of the contract you or the vendor or what was the negotiations for the length of the contract who who said it it was a negotiated
Speaker 24
44:05
point it's part of the negotiations thank you are
Speaker 50
44:09
you sure senator hammer Senator Love thank you so secret hudson
Senator Fredrick J. Love
Unverified
44:27
I'm going to say this because I I I hear what you're saying but I'm not buying that the competitive bid process is a competitive bid process. The direct negotiation is direct negotiation it's it's not a mince of the two and so if the agency chose to do a direct negotiation that's what you chose to do. I don't think you can call it a competitive bid. Now I would like to know I mean I
think senator Hammer already kind of asked the question but if you could do a direct negotiation with the the two that you already have why could you not do a direct negotiation with the third company? Why could you
not Again you know I would say that and
Speaker 15
45:17
I would refer you to our rules and I appreciate that you know we can just make statements that it's this or it's that we can't do no no that's what it is
Senator Fredrick J. Love
Unverified
45:29
certainly mean it's not it's not making a statement that's what it is you wouldn't have called it you would not call it a direct negotiation if it was a competitive bid. you just call it the competitive bid so that's the that's just a fact I'm happy to
Speaker 15
45:47
listen or I can answer the questions you can answer that's what I'm trying to do sir and so the process that we followed is the process that's authorized by the rules
and so that's what I would refer you to if you think anyone any member thinks that we did not follow the rules I'm happy to receive that correction. I don't think anybody can say that we follow the rules we cannot like the rules we can like it to be we would want it to be something else that's that's fine it's a policymaking body but we have to deal with what is and this is what is and again my point earlier and I'm about to my voice is about to give out I'm so I'm sorry
we felt like direct negotiations with the incumbent vendors would yield more savings to the state versus talking to a third party who had no experience with the state at all and would potentially you know give them reasons to you know hedge their offers that they're making to us not knowing what another third party might be coming in to offer on something so we felt like inre great negotiation was a better route to go we think the facts prove that out the results prove it out
Senator Fredrick J. Love
Unverified
47:03
How can we ensure that the end result would be better through direct negotiation I think the actual offers themselves show
Speaker 42
47:14
us that what's in the contract shows us that senator thank you so much sorry I'm getting over a cold right now. the final offer that we brought
Speaker 27
47:27
for you today it's less it is remarkably less
Speaker 15
47:33
than what we're currently paying a third party consultant that we retained has no affiliation with us doesn't work for anybody in the industry other than doing this work did the comparison from a market basis we're getting a good market deal on this
Speaker 135
47:53
so it's not just take my word look at the data
Senator Fredrick J. Love
Unverified
47:57
the data shows that now but the the contract that we're renegotiating the vendor that's our current vendor correct sir
OK, so I I guess I'm still
I'm still stuck on the fact that how how are we going to compare to the third vendor if the third vendor wasn't
Speaker 36
48:20
given the opportunity to be it we looked at other state lotteries that were similarly sized to us and similar revenue on an annual basis and compared what the kind of proposals and deals they were getting like we've said this is a very small industry
every vendors know when states are going to be up for you know, when their contracts are going to be up and everybody kind of talks to everybody and and they know like, OK, well, if I if I'm gonna try to bid on that I'm I'm gonna probably have to you know outbid this company. there are certain companies that are known to be more expensive than others and when we compared to other state lotteries that are similarly sized and and and generate revenue similar to us the
the rates that they were getting were higher than what this is and that is what our our industry expert helped us compile that data and that is why he could say he there should be a letter in your packet that's why he could say from from his expert opinion we achieved a better agreement under the proposed contract
Speaker 26
49:35
then we would have gotten had we gone out to RfP OK. all right thank you
Senator Ricky Hill
Unverified
49:43
Representative hawk . I'll be brief. I think
Representative RJ Hawk
Unverified
49:48
wouldn't you agree that we probably need to go in the rulemaking process and define what competitive bid is can can I just point out
Speaker 36
49:58
one thing. I'm not sure if you read the letter that I included but we keep talking about this competitive bid thing and I think that's it's just because
Representative RJ Hawk
Unverified
50:09
it's in statute that's the competitive bid work the the two words
competitive bid is in statute and so I'm just saying that isn't in our rules in any area that's why do you think I wasn't here when the rules were made right we have a whole lot of people here that that weren't here when that was done wouldn't you agree that maybe we should think about going back and rede maybe looking maybe now's not the right time I'm just asking your opinion do you think that we should go back and review those and also define what competitive bid is you know I think in terms
Representative John P. Carr
Unverified
50:44
of the rules the agency is believes the rules are working you know we've lived with them for a long time. you know they're the statute is brief
Speaker 89
50:51
you know if there is a desire to do some fine tuning in the statutory language we'd be happy to kind of work with the
Speaker 44
50:59
general assembly during session to talk about that but again all that we're doing here in the lottery
Speaker 132
51:06
same stuff's available in general procurement law same stuff's available we're not doing anything here that is unique that's not available under state procurement law it's all there too
Representative Howard M. Beaty, Jr.
Unverified
51:19
p re s ent ative beatty thank thank you Mr chairir. my question the the both of these vendors have been been vendors with the state you referenced2009 for one. when did the other vendor contract with the state 2009 at the inception of the lottery so both of them have been vendors with the stain and established track track records since 2009. had there been any major problems with either the vendors during that period? No. So they've been good partners with
the state since 2009 taking care of the lottery for us this review process leads to a lower rate for the state to pay, correct correct and then you're following the rules that the legislature approved for you correct?ect and then we've got a third party letter at the back of your packet that states in in the professional opinion of of her Deahanty that it is his professional opinion
that the contract and proposal that you have right now that that this body's looking at is superior to what the lottery could reasonably expect to obtain through a new competitive procurement process at this time is that correct that's correct all right I I just see
Speaker 150
52:41
if I was missing something. thank you thank you
Senator Ricky Hill
Unverified
52:45
Representative beatty very well put. Representative Crawford thank you Mrir. I'd
Representative Cindy Crawford
Unverified
52:51
like to make a motion please I'm not ready for that yet. I'll come
Senator Ricky Hill
Unverified
52:56
back to you. I want to make sure everyone in ish ed asking questions first so just hold that
thought OK do we have any other
Speaker 93
53:13
questions from the committee senator Petty senator Paty thank you Mr Chair.
Senator Jim Petty
Unverified
53:16
So I understand I've been over here reading and I understand the conversation around bidding but if if the statute
I mean if if the intention was for the lottery to follow statute why would they have had the exception in there if if the way I read it it would say the lottery will follow the state statute but there's exceptions are in there maybe they're not clearly or as clearly as as someone would like to have but I I see what you're talking about on the procurement
versus RfP versus you know, straight bid. So any any thoughts or maybe any other legislators that have been around longer might have an idea why we would have said it the way
Speaker 101
54:07
we did. I think the in 10 tion was what you
Speaker 36
54:11
just said because these con because this industry is so unique and these contracts are expensive and lengthy that's why there is an exception and that was absolutely the intent of the statute was to create an exception for that for us to use
an alternative procurement method which is set out in our rules under4.5 alternative methods and you can use that alternative method under three circumstances one, if it will maximize the net revenue 2, if it will achieve a specific business objective or3 if it will aid the director in fulfilling the statutory mandate to operate and administer the lottery. I would argue that this alternative procurement method that we use achieves all three of those requirements
Speaker 89
54:57
as you can under state procurement law same sort of approach you
Speaker 9
55:02
can do interstate procurement law this is just a different way of getting there Representative
Representative Andrew Collins
Unverified
55:09
Collins just on that point about the exceptions, I I just want to point out that those are exceptions where you don't have to accept the lowest bid but you do have to bid these major procurement contracts so that's the exception it's not that you don't have to have a competitive bidding process it's just that you have the flexibility or they
have the flexibility to take a higher bid unless it's printing
Speaker 26
55:32
stationary or supplies. No actually I'm sorry just to correct under alternative methods B alternative methods may include but are not limited to
Speaker 36
55:41
multistep bids or proposals, single proposer negotiations, competitive negotiations between two or more brand name solicitations and cooperative procurements. So in this in this what's the site on that I'm sorry what are you citing4.5
Representative Andrew Collins
Unverified
55:59
of the rule is statute I'm reading though statute trump's rule so and that's fine that it's in the rule it may need to be changed but it can't be inconsistent with statute and so unless he's talking about ins exceptions in the rule if he's talking about what I think is which is C3 in statute that says printing stationery and supplies and it does contemplate competitively bid because that's what it says in two ga in I think I think
Speaker 131
56:22
you're defining that to mean a certain thing and I and I appreciate
Speaker 15
56:30
that perspective but you're grafting into this language a statutory understanding from state procurement law that's not explicitly in this text it's just not that the text is
Speaker 44
56:40
very brief and contemporaneous with this that language the general assembly also said lottery we want you to go make rules on that which they did which were validly promulgated came before this body and were approved and so the
Speaker 132
56:55
rules are part of the governing law for the lottery until they're changed and they
Representative Andrew Collins
Unverified
57:00
have not been changed understand that what I was saying was in reference to the question about construction from Senator Petty and so I
think as far as the construction of the statute it doesn't negate the requirement to have competitive
Speaker 164
57:14
bidding. that was my point there thanks. thank youpresentative Collins en
Speaker 118
57:19
ha m m er 15 seconds you won't take long. Hey y'all probably have the benefits of it without me looking it up.
Senator Kim Hammer
Unverified
57:25
The rule when was it promulgated when the when the lottery was originally set up
and it hasn't been changed since then is is that what you
Speaker 89
57:35
show or it hasn't been changed since then I think it was promulgated when there was a lottery commission an independent body and so
Speaker 132
57:40
it's just been carried forward now as into the years as they've been part of a DFfa as well
Senator Ricky Hill
Unverified
57:49
right the lottery's been around how long? Since2009 OK thank you Representative Collins if you'll get back in the queue
Speaker 5
57:59
oh crawford I said Colin sorry Representative Crawford
Representative Cindy Crawford
Unverified
58:07
I would like to propose a motion to hold the contract until next month. there are some colleagues that are not here that would like to be in on this and Secretaryhudson you did say that we have enough time to get in there so I'm just thinking holding up one more month will not hurt the process that would be my motion you heard you heard the motion do we
Senator Ricky Hill
Unverified
58:33
have a second did not say that
Speaker 89
58:38
we do have a second discussion Mr. Chairman, I know this is your time, you know in terms of debating motions and I'll proceed to debate but I do think it's a matter of personal privilege I appear before this body on a regular basis and I don't think my remarks were accurately depicted. I did not say
Speaker 42
58:56
nor do I agree with the proposition that a month's delay won't be a problem. I think it will be a problem and the department does not support that and I want I want to get you to
Senator Ricky Hill
Unverified
59:03
elaborate a little bit more as chairman I'm going to ask you to
answer specifically what uhpresentative Crawford brought up about the time frame and everything I want you to go through that again and how that will affect this if if this motion passes I want everyone
Speaker 40
59:19
to understand that we would likely have to do is make an emergency
Speaker 36
59:23
extension to our current contract in order to get us through the conversion process in a timely manner and what that's going to do is that's going to cost us more money which means less money to scholarships it's also going to create an a pretty significant disruption in in sales and so ultimately what would waiting a
month change toward wa because nothing's gonna change on our end in in a month except that it's going to prolong the conversion process. it's going to cost us more money and it's going to reduce the number of dollars that we send
Speaker 26
59:54
to ADHE. thank you for that explanation
Senator Ricky Hill
Unverified
59:57
Senator Hammer Thank you Monie and I
Senator Kim Hammer
Unverified
1:00:04
wanted to you the want to give the director a
chance to have what he just said as far as a a response to what was said at least wanted to grant you kind of common courtesy to be able to give you that opportunity but you said that but and and miss chairir, maybe this is a little bit outside the realm of discussion but is any are there any representatives from the company in the room or they're here today for this discussion I'm gonna have to go to the director
Speaker 118
1:00:30
for that I don't see any staff from the from the companies here
Senator Kim Hammer
Unverified
1:00:44
all right my discussion along the motion is this Mister Chairman, if they had this many dollars on the line, I think I'd be in the room and I don't think that settles well on the other side of the coin the outside of the ticket is that I I really would like to hear the delay by one month. I heard the explanation a while ago but I'm I'm a little bit leery that delaying it one month might put us in a difficult
position but I don't think there's been enough discussion on that maybe to reach that level of of comfort other than what's been said here. I wish I wish the company was here that we could ask them personally not to discredit you. I'm not saying that to either one of y'all, but I wish the company was here to be able to answer for themselves. Thank you. Senator Hammer I
Senator Ricky Hill
Unverified
1:01:34
think the company is here through them because of the negotiations they have been negotiating on behalf of the state of Arkansas and I feel like they've negotiated and that they are here on behalf of those companies as well as
themselves for that I guess the next point of discussion we need to look at too is what are we going to accomplish by waiting one month? what questions do y'all want answered that they cannot answer today that that's my if we're just delaying a month to come back here and hear the same testimony again there is no need in delaying so let's let's keep that in mind as we are discussing this Representative Richmond thank you Mr Chair .
Representative Marcus E. Richmond
Unverified
1:02:17
I would encourage colleagues to vote against this motion I mean the people that aren't here it's their choice we are here I see no reason to rehash this a month from now because the argument is process over results we're far more worried about the process in that for whatever reason that they've been doing it this way since the beginning of time suddenly there's an issue
and we're picking process over success now unless I misunderstood them, I understand we're getting more services for less money to me that's a win and why if we're going to deal with how they do this then everybody here can write a bill except me. I'm not going to come back. Everybody here can write a bill, submit a bill during the next general assembly session and fix this terrible, terrible
problem which seems to be working out to the state's benefit thank you Mr Chair thank you for those comments . Representative hawk
Representative RJ Hawk
Unverified
1:03:32
thank you Mr Chair. You know colleagues I I came into this meeting, spoke with many of you that I I I had concerns about this item and how it was gone I I think the Secretary Hudson has been a man of his word since many of us have talked to him and he he's pretty honest about
everything that goes on I would say that because the fact that you know it's going to cost us more money it's it's going to reduce the number of scholarships potentially by delaying it30 days all to come back and rediscuss and really not have any different of an outcome because if we if we move the kick the can down the road again after that th30 days then we're delaying it even more all to hear about that one bit. I think
the bigger issue in this are the rules
and and and the the the process is in play when it comes to that and so I I'm gonna I would vote no against the motion on this just to get this thing done but I would ask that we review the rules
and the procurement process because I think what some people want to know is that third they just want to see what the numbers are for that third vendor. I I understand you guys are the the experts in this and you guys you guys know it but they just people in this body want to see
what that looks like I think you said it was a pretty substantial savings that we're gonna be making on this and that that's why I'm confident in this that with the current vendors that that have been working we're saving money we we move forward and so
Representative Cindy Crawford
Unverified
1:05:11
I'll be voting no on the motion. thank you Representative crawford. thank you once again, I'm speaking for my colleagues that aren't here today. So some of the things that they are concerned
about is the competitive bid which you guys have
Senator Ricky Hill
Unverified
1:05:28
talked about if they would have wanted to express their opinion they would have been here they are not here so
Representative Cindy Crawford
Unverified
1:05:34
they have no say so today. right I will stand by my motion for my colleagues and leave it at that. thank
Senator Ricky Hill
Unverified
1:05:40
you ma'am we have a motion to to hold for a month this review all those in favor say aye opposed sayy no no no s have it
Speaker 89
1:05:55
this is reviewed thank you Mr Chairman I won't go ahead and step out and let uhharron finish her presentation
Speaker 188
1:06:03
just real quick point of personal privilege I want to thank
Senator Ricky Hill
Unverified
1:06:06
this committee. I'd like for you to stay there with this case we need you on
Speaker 15
1:06:09
this next one too I'm I'm happy to do that but I do want you to know I don't
Speaker 44
1:06:13
take lightly this committee's trust in the information we provide to you and I always want to make sure we're serving all of you very well. so thank you let
Senator Ricky Hill
Unverified
1:06:21
me back up on that I've got to ask we actually voted on the motion that she thatpresentative
Crawford had we did vote on that yes we voted on her motion. Yes. now we have to have a motion to review the contract I've got that from Representative gonzalez and seconded by Senator English all those in favor say aye opposed same sign now it is officially reviewed thank you and you do want me to stay you think you might have any more questions
y'all well the director may may not want you there Director Strong
please go ahead we need a motion first to we need a motion to review the lottery lottery directors we're not reviewing that
one ok we're just hearing testimony there we
Speaker 36
1:07:20
go next item go ahead is just to re it's just for me to present our our normal monthly report and so that is
for the month of September 2025. So September of 2025 was an excellent month. It was actually the largest month of net proceeds in the history of the lottery we transferred $10,566,671 to the net proceeds account and we are up that's up by58.5%. year over year
if you look at where we are versus our budget we're30.7% better than our budget. and this is basically what I've already said it s well actually let me go back so for the month of September 25, our instant games were
8.8% up and62% up on the draw games. We benefited from a large uhowerball jackpot of 1.8 billion I believe it was so that helped us with our sales 10.5 million to net proceeds in the month of September and for the current fiscal year that ends June30th of 2026. we have322 million in the trust account.
for the total debt set off which is when someone comes to claim they're winning lottery ticket if they owe child support or taxes we we take that you know out before we pay out their winnings. there isn't any on taxes there was3,554 dollars for child support but because the tax deadline has been pushed out where that's why that number is0. we're expecting more over the next few months as that deadline approaches we had no requests from the from
AdHE during the month of September 25. we have several new games that were launched including new scratch off games and fast play games and that's it. thank you for that report . Happy to take questions
Speaker 101
1:09:51
on any of that do we have any questions
Speaker 118
1:10:14
Senatorhammer thank you.ine it's not a question but before you get away from the table I've got a request
Senator Kim Hammer
Unverified
1:10:20
at the appropriate time please. please go ahead with it the unless I'm missing it and maybe you could just direct me to where it is because I I haven't found it yet maybe I'm just overlooking it the the arguments that y'all used for the previous contract as far as the savings and the timeline in order for them to get the equipment do you have any specific document that you could share just so we could see those
projected savings in the basis upon which you arrived at there are going to be projected savings or could you at least provide that so we could be educated and see how that plays
Speaker 36
1:10:55
out over the next year. So for fiscal so it's a percentage based on sales. So if we use the amount of revenue that we made in fiscal 25 just as the the comparison I think we're at580 million in in fiscal 25. so we're pa we paid 2.11%
currently in the new contract it's going to be 2.05%. So if we are if we're comparing apples to apples we're gonna pay less on580 million than we would if we made the same. Senator if you'll just refer to the
Representative John P. Carr
Unverified
1:11:30
letter thatharron sent to the chairs that lays it out the second page of that letter shows what the pricing savings are and how we arrived
Speaker 188
1:11:37
at that money it's there in the letter on the second page what letter is that it's the cover letter it's in it's in the
docket that's on the blr website. it's her letter to the chairs
Senator Ricky Hill
Unverified
1:11:53
it's in there senator hammer all right thank youen Love make it fast thank
Senator Fredrick J. Love
Unverified
1:12:00
you oh I just want to add this is a this is the
question I really want to ask. Now why does it seem like Arkansas does not have any powerball or megamillion winners. all the other states have them and we don't seem to be getting hit so can anyone answer that question for me?
we're3 million people out of300 million it's m just saying it seems like there's other states that keep getting those those those winners and then we get nothing. we're
Speaker 26
1:12:32
actually had a50,000 dollars Powerball winner yesterday I believe is that
Senator Fredrick J. Love
Unverified
1:12:37
right Well50,000 dollars mean I know Secretary Hudson got that in his pocket but I'm just saying you know I'm talking about some big winners senator if I knew the answer to
Speaker 42
1:12:48
that question you and I'd be out buying Powerball tickets right now.
Senator Ricky Hill
Unverified
1:12:55
that's a very good answer you'll have a good one. OK committee we have received this we have received this report and thank you very much director for that up next we have Doctor Warden and Mr Fuller from AdhE Thank you Mr Secretary Please introduce yourself for
Speaker 207
1:13:26
the record and looks like you got it by yourself today so unfortunately Doctor Warden
Nick Fuller
Unverified
1:13:29
is out of state so you just have me today I'm Nick Fuller I'm the assistant commissioner for finance for the division of higher edd and I will bring you a few lighter notes on how we've spent the lottery money for over the past year please proceed tell you these first two reports these are going to be the first one is preliminary reports on the the first run of this data. students have until October 1st to send in any hours over the summer that they made up if they were
put on probation for not getting enough hours orgPA in the last year so we'll bring final numbers for for this to you at a later meeting. it's usually December when we bring those numbers but the the first item for for your review is the number of students that we awarded the academic challenge scholarship to for fiscal 25 if you'll see their 27,186 students were awarded these scholarships the total of 99 million dollars.
in the the first year first time students there were 11,836 of those the first time they've received the scholarship for a total of35 million . Also this was the first year for the academic challengellenge plus awards for students that are lower income they're able to get up to the full seniorle award beginning start with their freshman year rather than the tiered levels of those 27,000 total students,10,313 of them received those additional awards
with a total of 19.7 million of that 9ty9 was for this academic challenge plus that you all passed and it was the first year in 25. so we've seen quite a large increase over the year of spending that funds and then also with the Access Act that was passed this last year we'll see a a bigger increase you know we increased the freshman award for everyone from $1000 to2,000 dollars beginning this current year that started this fall so we should be more than likely topping $100 million on the academic challenge for sure in this coming year and we'll come back next year for you.
and umm open up to any questions you
Senator Ricky Hill
Unverified
1:15:37
may have on the academic challenge report in the first one we have any questions representative gonzalez
Speaker 214
1:15:44
thank you chair . So what does a student have to do to qualify for this these scholarships to
Nick Fuller
Unverified
1:15:51
apply you have to fill out the FfaFSA the the federalized student application and then on the academic challenge in the past year had ever a 19 on the ACT with access we've changed
that emission eligibility requirement where you have to have a3.0gPA in high school or a 19. so we kind of broadened the eligibility as well but in the in the past you if you had a 19 ACT and you completed the FfaA then you were eligible for that. how many are applying for that aren't getting it I'd have to look but maybe there's not not a whole lot there's probably 1000 you can get this yes sir and we have other scholarships that that don't even have that that 19 requirement you know the
Arkansas Future scholarship if you want to go to get your associate degree to begin with we'll cover tuition fees, everything for you to go to a two year college basically as much free as we can if you can't qualify for that you can apply for for we're we're spending around5 million dollars a year on that program and that would be presented later in this report as well thank you we have any other questions seeing none we
Senator Ricky Hill
Unverified
1:16:56
have received that report and let's move on to the next one. The the second item is the report for the
Nick Fuller
Unverified
1:17:04
workforce challenge scholarship. this is the one that's $800 per program. It will cover both credit and noncredit workforce training programs. This also was amended through the Access Act. This will be increasing to up to3,000 dollars per year and we're also including private career workforce training programs in this moving forward so the rules are being promulgated on that should be implemented probably this probably won't be implemented until fiscal 27. but you'll see there were 2,704 students that received this award this year
and $2.2 million which is about a million dollars increase over the last year on the usage of this one. any
Senator Ricky Hill
Unverified
1:17:47
questions on we do have a question Senator Love since you have seemed to replace Senator Hammer on the questions we'll go to you
Senator Fredrick J. Love
Unverified
1:17:59
that was wrong Nick good to see you. Heyy just I wanted to touch base on the the fact you say it's open to private ok so is
is this does this cover apprenticeship programs any any any apprenticeship
Speaker 218
1:18:15
if they are on the eligible training partnert provider list that is that is the the list we're
Nick Fuller
Unverified
1:18:22
using for eligible entities to be able to provide these services eligible that's like the officerkis development and the department of commerce administered that list Mrir could get that can get that
Nick Fuller
Unverified
1:18:39
still working through the official promulgation of the rules and then and we'll have that of of everyone that will be included on that so
Senator Fredrick J. Love
Unverified
1:18:47
you but you do have a list you do have a current list right now right I'd like to get that current
Senator Ricky Hill
Unverified
1:18:58
list please thank you thank you for that Mr Fuller OK committee we have received this report from the Arkansas division of higher Education. let's move on to exhibits E1 and E2.
Nick Fuller
Unverified
1:19:12
exhibit E1 is the report of the expenditures of the higher education grants fund as well as the net proceeds fund the net proceeds are the lottery funds which do the academic challenge workforce challenge and the concurrent challenge which has now been rebranded to theccess to accelerationgra through Ax access. The higherducation grants fun funds every other scholarship that we administer through the division of higherducation and you will see on page three of the report the list of those scholarships
the first item is the $20 million in general revenue that we are required by statute to support academic challenge because the lottery funds s supplement and do not supplant state revenue so that 20 million is what was in place for academic challenge in 2009 when the lottery started so we've continued that that funding at the $20 million level sincence then and you'll see all of the other programs and what we spent in 25 from the higher education grants fund which includes both general revenue and educational
excellence trust funds or where the revenues come
Senator Ricky Hill
Unverified
1:20:20
from for those. any questions do we have any questions Saying none moving on to exhibit e
Nick Fuller
Unverified
1:20:29
two and E2 is going to be the presentation of the expenses related to administration of the lottery programs these are what our office the expense our office have incurred which include the payroll for our staff as well as the maintenance and operation of our
scholarship application management system, the web-based portal where you apply for the scholarships this year the reimbursement request is for730,000 dollars. that is about35,000 dollars more than it was last year. all of that increase is due to merit raises or career service payments for the the staff. if you will look if you can look back at last year's report our operating expenses actually dropped by almost $15,000 from what we spent so every every bit of the increase is due to payroll obligations.
Senator Ricky Hill
Unverified
1:21:18
you know open for any questions you may have on that any questions for Mr Fuller? seeing none thank you Mr Fuller for all the reports and committee that to be exhibits E1 and2. The reports have been given seeing no other business, this meeting is adjourned you get a
Agenda
A. Call to Order
B. Review of Intralot and Scientific Games Contracts [Exhibit B]
C. Arkansas Lottery Director Report [Exhibit C]
D. Update of Arkansas Division of Higher Education (ADHE) Academic Challenge and Workforce Challenge Scholarship Award Data & Student Status Report (A.C.A § 6-85-219(c)) [Exhibits D1-D2]
E. Reports from the Arkansas Division of Higher Education (ADHE) [Exhibits E1-E2]
F. Other Business
G. Adjournment
Documents
Speakers
Senator Ricky Hill
Unverified
Speaker 6
Speaker 11
Speaker 13
Speaker 15
Speaker 16
Speaker 27
Speaker 28
Speaker 35
Speaker 36
Representative John P. Carr
Unverified
Speaker 40
Speaker 26
Speaker 42
Speaker 43
Speaker 44
Speaker 19
Representative Andrew Collins
Unverified
Speaker 34
Representative RJ Hawk
Unverified
Speaker 82
Speaker 10
Speaker 89
Senator Kim Hammer
Unverified
Speaker 101
Speaker 24
Speaker 50
Senator Fredrick J. Love
Unverified
Speaker 135
Speaker 132
Representative Howard M. Beaty, Jr.
Unverified
Speaker 150
Representative Cindy Crawford
Unverified
Speaker 93
Senator Jim Petty
Unverified
Speaker 9
Speaker 131
Speaker 164
Speaker 118
Speaker 5
Representative Marcus E. Richmond
Unverified
Speaker 188
Speaker 207
Nick Fuller
Unverified
Speaker 214
Speaker 218
Speaker 203