Kansas Lottery approves $70 million gaming system contract to new vendor

A new contract for the Kansas Lottery’s gaming system was approved today at the Kansas Lottery Commission meeting.

It is a change from 30-year vendor IGT at the Kansas Lottery.

Lottery officials signed the contract, estimated at $70 million to $80 million over a 10-year period, for Scientific Games. The contract could take effect in July of 2018, according to officials. A five-year extension option to renew will be possible. The gaming system provides terminals for the Kansas Lottery and provides back-office technology, a spokeswoman said.

Lottery officials Catherine Moyer, chairperson, and Terry Presta, executive director, signed the contract today and had it hand-carried to the state’s director of purchasing in the administration department, which would have to sign it to take effect, a lottery spokeswoman said. The purchasing department would review the contract, sign off and issue a final document, according to lottery officials at the meeting.

It is the first time in 30 years that a vendor other than IGT was approved for the contract. IGT will continue to be a vendor on instant tickets, said Sally Lunsford, a spokeswoman for the Kansas Lottery, and IGT continues to have the state casinos’ central gaming system contract, in effect for two years under a separate contract.

The three other bidders for the gaming contract approved today were IGT, Novomatic and Intralot.

At the Lottery Commission meeting, officials said a committee evaluated the proposals on these points: having the best interest of the lottery and state in mind, technology and innovation, the quality of technology information, and embracing the lottery as a business partner.

Presta, Kansas Lottery executive director, said he appreciated all IGT and GTECH had done for the past 30 years at the lottery.

Presta outlined the lottery’s vision for 2022, with a bigger role for technology. He said he foresees lottery customers who are able to be reached at the grocery store via various media including their cell phones, and customers using electronic displays for the lottery on store display tables, as the customer watches a video screen where a ticket holder talks about his big win. The customer is also able to use his phone to buy tickets sometime in the future, he hopes.

It’s a system that could try to reach more lottery customers more narrowly, directly through messages on their social media, as opposed to totally relying on wider, traditional media advertising.

Presta said he also foresees the Kansas Lottery surpassing a half-billion dollars in sales for the first time.

“All the technology to allow us, I believe, to hit $500 million in sales is somewhere in the future,” he said. He couldn’t predict how many years it would take, but he said the new contract would more closely align the lottery with its goals and vision of the future with the vendor.

At $500 million, with a 29 percent net to the bottom line, the lottery would bring $145 million to the state as opposed to the $75.2 million it transferred last year, Presta said.

“Scientific Games will be a good partner for years to come,” said Lottery Commissioner Tom Roberts, from Kansas City, Kansas. He was on the selection committee for the contract.

He added he was impressed with the contract and the company.

The Kansas Legislature, which approves changes in state law regulating the lottery, also will play a role in the future of the lottery, as will the governor. The Legislature passed House Bill 2313 expanding lottery ticket vending machines at locations such as convenience stores this year and extending the Lottery past its sunset of July 2022, but it was vetoed by the governor, who stated in his veto message that the lottery workers do a good job, but, “The Kansas Lottery has a disproportionately negative effect on low income Kansans. Rather than investing limited resources in games of chance, our goal is to help low income citizens find a path to self-reliance and independence through education, work and savings.”

Mega Millions, other lottery games changing

Lottery officials said this year, changes are ahead for Mega Millions and some other lottery games.

Lunsford said the Mega Millions game will change from $1 a ticket to a $2 game in October. Jackpots will be a lot larger and climb a lot faster, she said. Since these lottery ticket games are jackpot-driven, it will be a good change for Mega Millions, she added.

Now Mega Millions will cost the same as a Powerball ticket, $2 each. The Hot Lotto game, a $1 ticket, will end on Oct. 28, she said.

A new Lotto America game will now be the new $1 lottery ticket in Kansas, according to lottery officials. While the game has the same name as the predecessor of Powerball, it is not the same game, Lunsford said.

Matthew Schwartz, the director of finance, said some growth is expected from the Mega Millions game change, but it is hard to know the tradeoff and whether lottery players will change from one game to another as the jackpots climb. The Kansas Lottery is projecting growth from $12 million to $15 million on Mega Millions in the midyear, he added.

In April, Powerball will come out with a winner-take-all for an additional $1 wager with extra drawings on Monday and Thursday, to take and share the entire prize from each of the drawings that week, he said.

Besides Lotto America, Kansas Cash will remain at $1, also.

“We try to get a variety of things people can pick and choose from, there still will be a couple of good games to play for a dollar,” Lunsford said.

And the Holiday Millionaire Raffle ticket, a Kansas Lottery game in its ninth year, goes on sale this Friday, she said. It’s a $20 ticket, with the top prize of $1 million.

This year the lottery added two secondary prizes of $100,000, with big cash prizes added at the end of the contest this year, she said. There will be holiday bonus drawings for $10,000 each Sunday from Oct. 1 to Dec. 17.

Besides the drawing for $1 million on Jan. 3, there will be many smaller prizes also drawn that day, lottery officials said. This is a slight change from last year when some of the prizes were “instant wins.”

Schwartz said the Holiday Millionaire Raffle ticket received responses from retailers who struggled with how to do the $20 instant win, and players who didn’t much recognize the value of the $20 instant win and wanted to see more of the prizes at the end.

Kansas casino revenues down for August as compared to July; slightly better for August 2017 compared to August 2016

Combined Kansas casino gaming revenues for the month of August as compared to the month of July were down about $2 million as the summer vacation season ended, according to figures released today by the Kansas Lottery Commission.

At Hollywood Casino in Kansas City, Kansas, revenues were $11.94 million in August as compared to $12.32 million in July, according to Keith Kocher, the lottery’s director of program assurance and integrity. He announced the revenue figures at today’s Kansas Lottery Commission meeting. Three percent of the casino gaming revenues at Hollywood Casino go to the Unified Government, while the state of Kansas gets around 22 percent.

Kocher also said that when the August 2017 figures for the four casinos are compared with the August 2016 figures, this year’s figures are a little higher than last year.

At Hollywood Casino, some upcoming entertainment events scheduled on the casino floor are Flashback, Sept. 29 and 30, County Road 5, Oct. 6 and 7, and Ramblin’ Fever, Oct. 20 and 21. Race weekend will be Oct. 20-22 next door at the Kansas Speedway, with the Cup race Oct. 22.

The new casino, Kansas Crossing in Pittsburg, Kansas, reported revenues of $2.35 million in July, and $2.44 million in August, Kocher said. Dueling Pianos will be performing Sept. 29-30 at the Corral Stage in Pittsburg, with Hairball Oct. 20, and Mini Kiss Oct. 27.

Boot Hill Casino in Dodge City, Kansas, reported gaming revenues of $3.44 million in July and $3.14 million in August. Kansas will be playing at the arena there Oct. 20, and Wynonna Judd on Dec. 10.

Kansas Star Casino in Mulvane, Kansas, in the Wichita area, reported $15.44 million in gaming revenues for July and $14.26 million for August, Kocher said. Although attendance was down about 1 percent, according to Kansas Star’s written report, there are special events scheduled at the arena there, including Jennifer Nettles, on Sept. 30, Larry the Cable Guy Oct. 21, the National Finals Steer Roping Nov. 10-11, and Big and Rich on Nov. 18.

Schwartz, the director of finance, said he would be lowering the projected budget revenues slightly for the new Kansas Crossing Casino in Pittsburg, Kansas. He said the older revenue projections were made only a few weeks after that casino opened March 29 of this year, and the newer projections will be a little more conservative. Kansas Crossing has made $12.9 million in gaming revenue since its opening, according to lottery figures.

This time, the entire new Kansas Lottery budget will be a little more conservative, Schwartz told the Lottery Commission.

According to a Kansas Crossing September written report to the Kansas Racing and Gaming Commission, the Kansas Crossing recently shut down its table games on weekdays from 2 a.m. to 10 a.m. starting Aug. 23, and is downsizing the staff by 11 persons.


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