New Hampshire Lottery Commission
January 9, 2007
Meeting Minutes:
NEW HAMPSHIRE LOTTERY® COMMISSION
14 INTEGRA DRIVE, CONCORD, NEW HAMPSHIRE 03301
MINUTES OF COMMISSION MEETING
TUESDAY, JANUARY 9, 2007
PRESENT:
Richard J. Campbell, Jr., Commissioner
Paul J. Holloway, Commissioner
Arthur P. Klemm, Jr., Commissioner
Rick Wisler, Executive Director
Robert Preston, Games Manager
Diane Campbell, Administrative Assistant I
Leonard Mannino, Security Director
James Bradley, OIT
Maura McCann, Programs Information Officer
Barry Bodell, Administrative Services
Georges Roy, Administrator III
Travis York, Griffin Bodi & Krause, Inc.
Rose Longo-White, Griffin Bodi & Krause, Inc.
Rob Grimmett, Griffin Bodi & Krause, Inc.
Moe Pepin, SGI
Liz Dimmick, SGI
Suzanne Bresette, Bresette and Co. (Pre-bidders conference)
Michelle Arsenault, Bresette and Co. (Pre-bidders conference)
Alan Armstrong- Tracy, Edwards, O’Neil(Pre-bidders conference)
Gary O’Neil-Tracy, Edwards, O’Neil(Pre-bidders conference)
Doug Wormick-Tracy, Edwards, O’Neil(Pre-bidders conference)
Sean Fitzpatrick, Kemp Goldberg(Pre-bidders conference)
Chris Nichols, NL Partners(Pre-bidders conference)
Linda Fanaras, Millennium Advertising(Pre-bidders conference)
Commissioner Campbell convened the commission meeting at 9:35 a.m.
1. ACCEPTANCE AND SIGNING OF PREVIOUS MINUTES:
Commissioner Holloway made a motion, seconded by Commissioner Klemm, to approve the December 11, 2006 Commission meeting minutes. So voted, unanimous.
2. FINANCIAL REPORT:
Georges Roy, Administrator III, distributed the most recent state Monthly Revenue Focus Report. Barry Bodell of Administrative Services explained that a new state financial system (ERP) was in development that will provide improved financial reporting of the Lottery’s revenues. Georges Roy distributed the most recent lottery-related Legislative Service Requests and applicable fiscal note worksheets to the Commission. Mr. Roy provided an explanation of the lottery’s assumptions and figures on the fiscal note worksheets.
Georges Roy stated the Lottery’s net profit to Education continued to be approximately 30% of the gross revenue. A discussion was held on the success of the $20.00 instant ticket and proposed bill for a $30.00 instant ticket.
3. TRI-STATE REPORT:
Maura McCann, Programs Information Officer, updated the Commission on the upcoming game replacement for Triple Play, called “Paycheck”. Ms. McCann announced the $2.00 Paycheck game sales will begin on January 17th with the first draw held on January 19th at approximately 6:55 p.m. on Tuesday and Friday. Ms. McCann stated the final Triple Play drawing will held on Friday January 12th and if the jackpot worth approximately $500,000 is not won, the jackpot prize money will be divided among all the other prize levels in the game. Ms. McCann presented the point of sale materials for Paycheck. The top prize in the game is $2,500 a month over a 10 year period or there is a cash option available.
A discussion was held on the yearly allocation of the expired unclaimed Tri-State prize money. Approximately 1 million dollars will go back to the players through promotion(s) around the holidays. Commissioner Campbell stated an administrative hearing was held at the Tri-State Commission meeting on January 5th regarding the suspension of the Iron Works Market License. The Tri-State Commission decision was to suspend their license to sell lottery products for one year based on the results of the hearing.
A brief discussion was held on a complaint received relative to the effective date printed on an on-line ticket. Director Wisler stated it is the player’s responsibility to check any ticket printed from the terminal before leaving a retailer location and advise the clerk if a misprint occurred.
4. ADVERTISING:
Travis York of Griffin, Bodi & Krause gave a brief overview of the advertising report to be presented to the Commission. Rose Longo-White of Griffin, Bodi & Krause reported that a corporate mailer was forwarded to all New Hampshire businesses with 50 or more employees (approximately 2000 businesses) in an effort to generate subscription orders and gift certificate sales. Ms. Longo-White reviewed the recent holiday marketing including Powerball subscription newspaper advertisements; radio advertisements for “Holiday Bucks” Add-a-Play; and weekly newsletters to advertise holiday gift giving ideas. The lottery sales representatives worked closely with the retailers on the first holiday lottery decorating contest at retailer locations called “Deck the Halls”. The retailer promotion offered from December 4-December 22 was successful with approximately 275 retailers participating and prizes awarded for their efforts.
Maura McCann stated that obtaining subscriptions through the lottery’s website generated approximately $70,000. The lottery’s current subscription process was discussed. Research of the Massachusetts subscription program offering out-of-state subscription sales will continue in an effort to help evaluate whether it would be beneficial for New Hampshire to offer out-of-state subscriptions. Scientific Games will research the possibility of New Hampshire accepting subscription sales through the on-line lottery terminals and generating the actual subscriptions.
Travis York stated that since the Replay launch on June 5, 2006, there are now over 70,000 Replay members. Mr. York reviewed a quarterly report provided to the Commission. The average number of Replay visitors per day is 3,300. There were 4,800 individuals who visited the site per day during the week of Christmas and 4,500 visitors per day during the week of New Year’s. Approximately 100,000 tickets were entered in the two week holiday period. Currently over 7.8 million tickets have been played through the Replay program. Mr. York stated over 136 million points have been earned through Replay; approximately 53 million points have been entered in monthly drawings; and 58 million points have been entered into ultimate drawings. We have exceeded $20 million in tickets being played on the Replay site, approximately $12.5 million instant and $8 million on-line. The largest percentage of on-line tickets being entered on the Replay site is Powerball at 54%; with Megabucks coming in second. The largest percentage of instant tickets being played through Replay are the $10 and $20 instant tickets, possibly due to the fact of higher point accumulation for these tickets.
Rob Grimmett of Griffin, Bodi & Krause reported that a Winter Points promotion was offered to encourage players to opt for an increased number of 500 points instead of selecting the instant win. Mr. Grimmett stated the players responded positively with an increased number of points issued during the promotion.
A brief discussion was held on considering possibilities for leveraging the assets of New Hampshire Lottery Replay to earn additional revenue for the Lottery. Travis York suggested a work session be scheduled to further discuss this.
Travis York stated a perforated Replay instant ticket with bonus Replay points will be released soon to heighten awareness of the Replay program and drive individuals to the website.
Commissioner Klemm complimented Cindi Murphy, Lottery Representative Supervisor and the lottery sales staff for jobs well done with the “Deck The Halls” Promotion.
5. ADVERTISING PRE-BIDDERS CONFERENCE:
Maura McCann, Programs Information Officer, convened the pre-bidders conference pertaining to the Advertising Request for Proposal. Ms. McCann introduced the three lottery Commissioners, Director, Administrative Assistant, Administrator III and James Bradley and Preston King of OIT. Representatives from various advertising agencies who attended the pre-bidders conference are noted as present on the first page of these minutes.
Ms. McCann gave an overview of her advertising position at the Lottery and explained there were two lottery advertising budgets, one for New Hampshire and one specifically for Tri-State games. Ms. McCann stated questions would be addressed and if unable to answer immediately, then written responses would be forwarded to all attending the conference.
Ms. McCann reviewed the proposal requirements. Ms. McCann stated there was an expected change pertaining to Replay prize fulfillment that may be implemented July 1st. Ms. McCann explained this area is currently handled by the lottery’s advertising agency but may be changed to being the lottery’s responsibility. Replay prize storage, inventory and distribution will hopefully be taken care of by the lottery, therefore freeing up approximately $50,000 of the advertising budget to be used for other means.
Ms. McCann opened up the session to address any questions from the advertising agencies. Suzanne Bresette of Bresette and Co. inquired about the budget breakdown for the website(s). Maura McCann responded that the $5,000 budget was for lottery website changes and the $144,000 was for enhancements to the Replay program, upgrades and uploads of prize information. Ms. Bresette requested a copy of the lottery’s marketing plan. Ms. McCann responded this information will be forwarded soon.
Linda Fanaras of Millennium Advertising asked who the lottery currently contracts with for advertising services. Ms. McCann responded the lottery’s current advertising vendor was Griffin, Bodi & Krause, Inc. of Manchester, New Hampshire and had been so since 1985. Ms. Fanaras inquired why the lottery was going out to bid. Director Wisler responded that the state requires state agencies to go out to bid. Director Wisler stated the ideas presented by the interested parties will be used as consideration in the selection process. Ms. McCann stated the lottery’s daily goal is to maximize net revenue for Education.
Sean Fitzpatrick of Kemp Goldberg asked if the incumbent agency was bidding again and were the contract renewal options exercised. Ms. McCann responded she did not know if the agency would be forwarding a bid and that both options on the contract had been exercised.
Travis York of Griffin, Bodi & Krause asked about lottery revenue trends. Ms. McCann responded that lottery sales and net revenue to Education have increased dramatically since the lottery’s inception. Ms. McCann and Director Wisler discussed the lottery’s history. Director Wisler stated the lottery sold 5.7 million tickets in 1964 when the lottery began and matched that amount of sales during the week of Christmas, 2006. Ms. McCann stated the New Hampshire Lottery ranks in the top ten per capita for instant ticket sales out of 40 lotteries. Director Wisler stated the lottery exceeded the budgeted amount for net revenue last year primarily due to the success of the $20 instant ticket and two record Powerball jackpots. Ms. McCann provided an explanation of the Replay program.
Linda Fanaras of Millennium Advertising asked if there was anything unusual that the current advertising agency does that might not be considered standard general marketing practices. Ms. McCann stated there were some areas connected with the Replay program that may be considered unique, but she would review this with Director Wisler and would forward an answer in a written response.
Gary O’Neil of Tracy, Edwards, O’Neil asked if the lottery could provide the most recent report showing a breakdown of instant ticket sales by price points. Director Wisler stated the updated sales report would be forwarded to all attending. Director Wisler stated legislation was in process for increasing the instant ticket price point from $20 to $30. A brief discussion was held regarding Tri-State game products and Tri-State Commission operations.
Chris Nichols of NL Partners inquired about how many field events the lottery holds in a year and how staffing is handled. Ms. McCann stated there were not as many field events held compared to prior years and the lottery and the advertising agency currently participate each year in the SandJam event at Hampton Beach. Other events that only the lottery is involved in is ticket selling at the Hopkinton Fair, and Eastern States Exposition. A question was raised if the lottery would be expecting the advertising agency to become involved in more of these type of activities in the future. Director Wisler stated the return on the investment would have to be considered before additional opportunities occur.
Ms. McCann stated responses to the three questions raised at this meeting would be forwarded to all who attended.
6. NEXT MEETING:
Commissioner Holloway made a motion, seconded by Commissioner Klemm, to adjourn the meeting at 12:30 p.m. So voted, unanimous.