Ohio Lottery Gambles on Operator Contract after Revenue Drop
June 11, 2013 – Although lawmakers expressed concern over the loss of revenue in the past year, they approved the Ohio Lottery’s contract extension with Georgia-based operator Intralot, Inc.
Joe Hallett from The Columbus Dispatch reported this morning that the State Controlling Board, which oversees spending for all Ohio state agencies, released funds to the Lottery Commission for the extension yesterday.
Intralot, Inc. received a two-year, $57 million extension to their contract with the Lottery, their third contract renewal since 2007.
The Ohio Lottery helps fund Ohio’s schools and hopes that their continued work with a trusted company will continue to provide funds for education.
But it’s likely that the operator will need to make significant improvements if they’d like a fourth renewal. Hallett said the Controlling Board “grilled [Lottery] officials about the lottery’s lackluster performance over the past year.”
“Pardon me if I’m not celebrating,” said Sen. Bill Coley. “We’ve been growing at a 6 to 8 percent per year clip and now we’re experiencing a 1 percent drop.”
Lottery officials expressed optimism, however, because the 1 percent slip in revenues they’ve seen since last May is much better than the 5 percent drop they had projected after several casinos and racinos opened in the state.
The draw of Ohio’s new casinos and racinos has likely helped the Lottery. As the Lottery’s finance director pointed out, video lottery terminals in the casinos, operated by Intralot, have helped add $30 million in lottery profits.
The Lottery is also hoping for higher sales numbers after a bill passed last week limited gambling in Ohio’s 800 or so Internet “sweepstakes” cafes, which retailers said were “eating into their business.”
The bill, House Bill 7, effectively forces those cafes out of business, which should eliminate competition for the Lottery, but Rep. Chris Redfern would still like to see the Lottery try more ways to increase revenue.
Redfern said he’d like to see the Lottery explore new games, adding his concern that “there has not been an embrace of new opportunities by the lottery commission.”