A sharply divided D.C. Lottery Board voted unexpectedly yesterday to rehire the company that runs its instant lottery to operate similar games for another two years, but said it would try to cut in half the fee it now pays the firm.
The board, on a 3-to-2 vote, ordered its staff to begin negotiations on specifics of the new contract with Games Production Inc., a year-old, minority-controlled company whose current contract expires in October. By that time the firm will have operated five consecutive games in which players scratch off surfaces of $1 tickets to determine instantly if they are winners or losers.
Board chairman Brant Coopersmith and two of his colleagues, Jerry Cooper and Lillian Wiggins, voted to rehire the firm. Board members Carolyn Lewis and Almore Dale dissented, with Lewis saying she did not know the issue of the contract renewal was scheduled for discussion.
Both Lewis and Dale said they felt more analysis was needed before a decision could be made on a renewal with Games Production. Lewis said it was possible that "maybe you don't need a contract with a vendor. I just thought we needed more study."
Coopersmith said, however, that the decision had to be made so that tickets could be printed in time for the instant game that would begin in October.
The board's action placed the contract for the instant game in the city's so-called sheltered market, meaning that it could go only to a minority firm with experience in running a lottery, a description that apparently fits only one firm in the world, Games Production.
However, the board said it will soon issue a request for bids on two other contracts for the instant games--one to provide tickets for the game starting in October, and another to handle advertising for the games. The board has followed a similar procedure in its long-delayed effort to start a daily numbers game such as the one now operating in Maryland.
The District is the only jurisdiction of 18 that operate lotteries in this country that has hired a private company to run an instant game--a choice the board defended as necessary so that it could begin its game as soon as possible last year. A Washington Post survey earlier this year showed that, as a result, the District has spent a greater percentage--24 percent--of the total amount wagered on overhead and administrative costs than all but two of the 17 other jurisdictions.
Games Production currently is paid 7.8 percent of the total amount wagered, about $56 million to date, to oversee the lottery's day-to-day operations, which include distributing lottery tickets, training sales agents, and staging drawings to pick milion-dollar winners. Its partner, Scientific Games Inc. of Atlanta, is paid another 1.2 percent to provide lottery advice.
Coopersmith said the board hopes to trim that 9 percent total to 4 percent or less in its negotiations with Games Production on the new contract.
In addition, he said, the amount spent on advertising will be cut from 4 percent of gross revenue to 2 percent and the amount for tickets from about 3 percent to 2.5 percent or less.