The state is now only days away from finalizing its $2.2 billion contract with Camelot Illinois, LLC for the private management of the Illinois Lottery.
Camelot, which manages the U.K. national lottery, provided the only bid received during the state’s request for proposals. It will replace current private manager Northstar. The 14-day period for protests to the bid, which began Sept. 22, ends this Friday. So far no bid protests have been filed, according to the board’s public information officer.
“Camelot has shown more than a decade of success in managing lotteries throughout the world,” Acting Lottery Director Greg Smith said in his Friday press release. “The Lottery and Camelot Illinois have common goals to responsibly grow the Lottery’s player base, align incentives, eliminate conflicts of interest, introduce new technology and innovation, and ensure responsiveness to public needs and concerns.”
Camelot first attempted to secure the management bid when lottery privatization began in 2009. When the contract was awarded to Northstar, Camelot filed a protest accusing the Department of Revenue of giving unfair advantages to Northstar.
Northstar’s relationship with the state has included several controversial incidents. During the most recent report on the Department of the Lottery, the office of the Auditor General scored the department for a failure to comply with state laws when it found $75 million in lottery funds were sent to Virginia without state authorization to pay prize-winners.
State lottery sales totalled $2.85 billion in the past two years, according to the Commission on Government Forecasting and Accountability, with a $14 million overall decline in sales over FY2017. Instant ticket sales accounted for $1.87 billion of the total, an increase of $60 million from last year’s subtotal as instant tickets surge ahead in popularity.
In their submitted bid, the group writes, “Camelot believes there is the potential to double annual Illinois Lottery Net Income from $0.7 billion today to $1.4 billion by FY2021.”
Executive director Anita Bedell of Illinois Church Action on Alcohol & Addiction Problems attended an Aug. 14 public hearing where Camelot presented its bid and state procurement employees explained the process. But Bedell still has several concerns.
“When they first had this private management contract we were concerned about how much money the company was actually going to get. Was it going to save money? One of the lottery’s interest is getting more money. Well, the way you get more money is if you market more, and market to those who are addicted, market to young people,” she said.
Bedell said unlike most public hearings she attends, she was allowed to ask only one question. Bedell wanted to know whether Camelot planned to expand Keno and scratch-off ticket sales in Illinois, as it had done in Pennsylvania where Keno was outlawed until Camelot entered a similar privatization contract with the state.
“If you have scratch off tickets on the internet it looks just like one of these free games and people could just go through a ton of money that way. I’m also concerned for children because they don’t have a good way to prevent children from gaming online,” Bedell said. “The faster people play, the faster they lose and the more they lose.”
Bedell said Lottery Control Board Acting Director Gregory Smith did not answer. As the bidding process is still technically ongoing, no information has yet been made public regarding the Camelot’s internet lottery plans. When The Daily Line asked about the company’s intentions, Camelot’s spokesperson declined to comment on whether it is interested in pursuing either Keno or internet scratch-off tickets.
The state’s procurement file for the contract will be available for public inspection on Friday, Sept. 29. The public may request access to the procurement file by contacting the lottery’s procurement officer, Helen Kim, at firstname.lastname@example.org. If bid no protests are submitted, or after all timely protests are resolved, a contract can be executed.
Northstar will continue to provide management services to the lottery until a successful transition is complete, although the Lottery Control Board declined to confirm when the transition would take effect as the information is within the undisclosed contract.
The next meeting of the Lottery Control Board is Friday, Dec. 8.