The Hoosier Lottery will soon by managed by a private company…and lottery officials say the move will boost income for the state. The Lottery Commission voted unanimously Wednesday to begin contract negotiations with Rhode Island-based company GTECH.
The contract, which lottery officials hope to sign by November first, will shift sales, marketing and distribution responsibilities to GTECH for 15 years. Lottery Commission executive director Karl Browning says, based on projections, the deal will generate $2.1 billion more for the state over the length of the contract.
“For the first five years, the average is $100 million a year more than what the lottery would perform on its own,” he says.
The contract also has penalties and incentives. GTECH sets a threshold each year of what it expects revenues will be; if revenue exceeds that amount, the company gets a bonus from the state equal to the amount by which revenue was up.
If GTECH fails to reach the threshold, it pays the state the difference. And lottery commission chairman William Zielke says the state is not selling off the lottery. GTECH will report to the commission.
“I’m comfortable that if they come to us with something that’s outside of what we think are acceptable parameters, we have the ability to deny that as an opportunity for them to grow that business,” he says.
Browning says no Hoosier lottery employees will lose their jobs. Around 125 will be given the opportunity to work for GTECH while about 50 employees will remain with the state.