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Hoosier Lottery Director Discusses Outsourcing

Hoosier Lottery. Executive Director Karl Browning said in a statement that the Indiana lottery will not outsource any operations if bidders do not meet the state’s high standards. The Hoosier lottery director released the statement after a spokeswoman for Camelot Global Services, which operate the UK National Lottery, told The Indianapolis Star it dropped out of the bidding because Indiana’s bidding process encourages bidders to set expected revenues too high. Australian lottery operator Tatts Group also dropped out of the bidding for similar reasons.

Tatts and Camelot were among four companies that submitted information to Hoosier lottery officials so background checks could be done. The other two companies that submitted information to Hoosier lottery officials are GTECH, located in Rhode Island, and New York based Scientific Games. Currently GTECH supplies and maintains instant ticket and vending machines in Indiana and Scientific Games, provides the lottery’s central online system and terminals. Hoosier Lottery Director Browning said that lottery officials will not release any more information about the proposals until a meeting to take place September 26th.

Browning indicated that a contract may be awarded during the upcoming meeting. Browning stated “If proposals meet our high standards and can significantly increase the lottery’s annual income, we will consider moving forward; if they don’t, we won’t award a contract.” Last year Indiana received $188 million from the lottery. Lottery officials and Indiana Governor Mitch Daniels hope that a private firm can boost sales and revenues. Browning said “We have an obligation to test the market to determine if the private sector can bring more value to the lottery operation.

In July the state of Indiana announced that they would seek a ten year contract with a private firm for lottery marketing, sales and distribution services. Last year neighboring state Illinois became the first state to privatize its lottery management. The Illinois contract went to Northstar Lottery Group, a partnership between GTECH and Scientific Games. Northstar brought in record lottery revenues but fell short of the $825 million the company had promised lottery officials. Northstar and the state of Illinois are currently in arbitration over the shortfall. New Jersey and Pennsylvania have expressed interest in privatizing their state lottery operations.