Florida Lottery plans major expansion
The Florida Lottery - which just registered more than US$6 billion in annual sales - is in line for a large expansion due to a massive new contract that state officials signed this month.
Lottery officials, who report to Governor Rick Scott, signed a 13-year contract worth more than US$700 million with IGT Global Solutions covering major aspects of the lottery, including the systems used to sell tickets for games such as Powerball and Mega Millions.
The contract is substantially larger than the existing one, even though sales for the so-called online games such as Powerball have remained steady for the last several years except for one year when a record jackpot pushed up sales.
One big change in the contract is a plan to nearly triple the number of automated ticket machines capable of selling both scratch-off tickets and those for online games such as Powerball. This would increase the number of machines statewide from 2,000 to 5,500. The contract also calls for a new smartphone application that will let players check their tickets and allow them to enter second chance sweepstakes that the Lottery also offers.
Lottery officials say the cost is tied to increased sales projections and that the amount paid to IGT will go down if there is a downturn in sales.
They also have estimated that the new contract will bring in more revenue. Nearly US$1.7 billion in lottery profits are being used this year to pay for education expenses, including the state's Bright Futures college scholarship.
"We are in the business to sell tickets and generate money for education," said Connie Barnes, a spokeswoman for the Florida Lottery.
But State Senator Rob Bradley questioned the plans by lottery officials to expand their gambling operations. He noted that this past year legislators considered bills that would have limited some of the tickets they can sell.
"If there are portions of the agreement that result in expansion of the lottery, that's a cause of concern," said Bradley, a north Florida Republican who has been in charge of the Senate committee that regulates gambling.
"This is a government-sponsored enterprise," Bradley added. "We have an extra obligation to make sure we are not preying on individuals addicted to gaming. We have to make sure we are not focusing on populations who can't afford to be spending their hard-earned dollars on gaming."
Florida currently has a contract with Gtech, one of the world's leading lottery operators that merged with International Game Technology and changed its name. IGT Global Solutions is a subsidiary. State records show the current contract which started in 2005 is worth roughly US$387 million. The new contract is worth as much as US$717 million after lottery officials exercised an option extending it to 13 years.
IGT, which beat out one other company for the contract, is represented by some high-powered lobbyists, including Bill Rubin, a long-time friend of Scott, and Brian Ballard, a Republican fundraiser and lobbyist who also currently serves as Florida finance chairman for GOP presidential nominee Donald Trump.