PUBLIC MEETING OF THE ARIZONA LOTTERY COMMISSION MINUTES AUGUST 21, 2015 PRESIDING Chair Frank Conley COMMISSIONERS Jeff Weintraub, Andy Anderson, and Chip Scutari LOTTERY GUESTS PUBLIC Tony V. Bouie, Executive Director; Brian Townsend, Deputy Director; Eric Borg, Director of Operations; Raynie Hosto, Director of Sales; Michael Schiefelbein, Director of Products; LaTrina Rosemond, Director of Accounting and Audit; and Steve O Ney, Director of Information Technology Barbara Anderson, Cindy Esquer, Shannon Nelson, Pam DiNunzio, Brett Moulton, Mark Strickling, Shelby Alessi, Tom Malone, Isaac Silva, Susan Kalember, Kimberly Siddall, Ivy Gilio, Monica Godek, Michael Federico, Tom Seow, Rick Crago, Roland Tang, Darlene Miller, Tasha Younger, and Jacqui Ayala LaneTerralever Representatives: Isabelle Jazo, Kirstin Jones, Carlos Pastor, Alison Rose, Annalilli Chacon, Megan Breinig and Amy Raymer IGT Representatives: Russ Harben, Marianne Manning, and Serena Arlotta American Games Representative: Dawn Archie Scientific Games Representative: Geneva McCaffery Attorney General Representative: Deanie Reh Brent Steffens, Kristine Burnett, Bob Paine, and Matt Owens Call to Order Pursuant to the Public Notice dated August 18, 2015, the Public Meeting of the Arizona State Lottery Commission was called to order at 10:00 a.m. by Chair Conley. A quorum was present. Chair Conley entertained a motion to approve the minutes of the June 19, 2015, Public meeting; Commissioner Weintraub moved, Commissioner Scutari seconded. All Chair Conley entertained a motion to approve the minutes of the July 1, 2015, Public meeting; Commissioner Weintraub moved, Commissioner Scutari seconded. All Chair Conley entertained a motion to approve the minutes of the July 8, 2015, Public meeting; Commissioner Scutari moved, Commissioner Weintraub seconded. All
Page 2 Chair Conley entertained a motion to approve the minutes of the July 8, 2015, Executive Session; Commissioner Scutari moved, Commissioner Weintraub seconded. All Retailer of the Year Recognition Mr. Michael Federico, Territory Manager, presented an overview of the Retailer of the Year, Chevron Self-Serve #10 located in Yuma, Arizona. Chair Conley stated that he really liked to see the validation number and the percent to sales. Chair Conley wanted to know how many other retailers are around them. Mr. Federico stated there were 3 other big retailers in the area Territory Manager of the Year Mr. Roland Tang recognized Mr. Tom Seow as the Territory Manager of the Year. Tom has been with the agency since 1981 and has always displayed a high level of professionalism with his retailers. Director s Report Director Bouie presented a PowerPoint overview of the Director s Report. The Director s Report is attached for the official minutes. Director Bouie shared the projected sales by category for FY16. Chair Conley asked what the percentage of increase that was for each category. Ms. Anderson said it was a bout a 9 ½% increase for instant games but did not have the percentage for draw games. Chair Conley asked in total what was the sales growth planned. Ms. Anderson said about 6 ½%. Commissioner Weintraub said he was concerned about the draw games if we do not do something nationally to get people interested. Director Bouie explained that is why the matrix is changing in October and we are adding a new instate draw game. He said the MUSL members also pitched in money to create an ad campaign for Powerball specifically to be used nationally. Chair Conley asked if we had a target number in mind for transfers. Director Bouie said $194 million. Chair Conley asked if we also had a G & A reduction plan. Director Bouie said we have contracts out to rebid and said we will be able to get some savings out of those categories. Retailer Satisfaction Survey Results Ms. Raynie Hosto gave an overview of the retailer survey. Received 430 responses or 15% of retailers. Surveyed seven (7) sections and received a satisfaction result of 97%.
Page 3 Out-of-Stocks Review Ms. Raynie Hosto gave an overview of out-of-stock statistics and why it s important to keep out-of-stocks low. She explained since 2010 we have consistently reduced out-of-stocks from 6.4% to 4.5% in 2014. Draw Game Changes Ms. Barb Anderson provided details on the matrix change in Powerball. In addition, Ms. Barb Anderson introduced the new draw game Five Card Cash. Changes to the Powerball and the launch of Five Card Cash will be October 4, 2015. Pull-Tab Expansion Assistant Director Schiefelbein gave an overview of the expansion of the pull-tab games due to House Bill 2517. The expansion of pull-tab games will include age restricted venues. New Business Chair Conley asked if any members of the public would like to address the Commission regarding new instant scratch game profiles Director s Edition #1023, Super Crazy 8 s #1032, 2X the Money #1034, and Big Money Game Book #1042. No response from the public. the order and authorize the Director to issue the order regarding new instant scratch game profiles #1023, #1032, #1034, and #1042. Commission Weintraub moved; Commissioner Scutari seconded. All members voting regarding new draw game profile 5 Card Cash. No response from the public. the order and authorize the Director to issue the order regarding new draw game profile 5 Card Cash. Commission Weintraub moved; Commissioner Scutari seconded. All members voting regarding amended Powerball draw game profile and amended PowerPlay promotion profile. No response from the public. the order and authorize the Director to issue the order regarding amended Powerball draw game profile and amended PowerPlay promotion profile. Commission Scutari moved; Commissioner Weintraub seconded. All members voting aye, the motion carried.
Page 4 regarding amended second-chance draw promotion profile for instant game, Monopoly Millionaires Club. No response from the public. the order and authorize the Director to issue the order regarding amended secondchance draw promotion profile for instant game, Monopoly Millionaires Club. Commission Anderson moved; Commissioner Scutari seconded. All members voting regarding new instant tab game profiles Ice Cold Pitcher #1001, Head N for Home #1002, Hit the Bullseye #1003, Turn the Tables #1004, Last Call #1005, Touchdown Drive #1006, I Like Big Bucks #1007, Right On Cue #1008, Slot Crazy #1009, and Bragging Rights #1010. No response from the public. the order and authorize the Director to issue the order regarding new instant tab game profiles #1001, #1002, #1003, #1004, #1005, #1006, #1007, #1008, #1009, and #1010. Commission Weintraub moved; Commissioner Scutari seconded. All members voting regarding Proposed Contract Award for solicitation #ADSPO15-00005009 Warehouse and Distribution Services for Pull Tabs. In accordance with A.R.S. 5-559 (C), Chair Conley entertained a motion to approve the order and authorize the Director to issue the order regarding Proposed Contract Award in Solicitation # ADSPO15-00005009 Warehouse and Distribution Services for Pull Tabs. Commissioner Weintraub moved; Commissioner Scutari seconded. All members voting In accordance to the vote Chair Conley stated the award to Pollard BankNote Limited will become effective and binding once the Lottery Procurement Officer signs the offer and acceptance. Call to the Public Chair Conley invited members of the public to speak before the Commission. No one from the public requested to speak. Announcements The next Commission meeting will be held September 18, 2015, at 10:00 a.m.
Page 5 Adjournment Chair Conley entertained a motion to adjourn, Commissioner Scutari moved; Commissioner Anderson seconded. All Meeting adjourned at 10:56 a.m. Materials A copy of the agenda and background material provided to Commission members, which is not exempt by law from public inspection, is available for public inspection at least 24 hours in advance of the meeting at the Lottery Office located at 4740 East University Drive, Phoenix, Arizona. Notice Any amendments or additions to the agenda will be made available at least 24 hours prior to the meeting.