INFORMATIONAL MEETING

TAPES 10 A-B;11, A

003

Acting Chair Galizio

Calls meeting to order at 1:32  P.M.

ORIENTATION MEETING

014

Mazen Malik

Begins slide presentation on OR Lottery

029

Malik

Slide: Lottery Terminology

043

Malik

Slide: Lottery History (2 slides)

078

Malik

Slide: Traditional Lottery Games; 2003-04 Net Receipts

089

Malik

Slide: Traditional Game Revenue (bar graph)

099

Malik

Slide: Traditional Game Revenue; Percentages (bar graph)

108

Malik

Slide: Video Lottery Revenue (bar graph)

118

Malik

Slide: Video Lottery Revenue: Percentages (bar graph)

124

Malik

Slide: Total Lottery Revenue (bar graph)

127

Malik

Slide: Total Lottery Revenue: Percentages (bar graph)

141

Malik

Slide: Lottery Transfers (bar graph)

155

Malik

Slide: 2003-05 Lottery Distributions (pie chart)

167

Rep. Boquist

Asked about total revenues received for 2003-05.

170

Malik

Response: The numbers can be found in the 2005 OR Public Finance: Basic Facts Research Report #1-05 issued by the Legislative Revenue Office (LRO), page K2.

190

Malik

Slide: Issues

205

Malik

Slide: Line Games

217

Malik

Slide: Video Price Percent

231

Malik

Slide: Annual Growth: Video

243

Malik

Slide: Video Compensation Rates (Old Rates)

258

Malik

Slide: Video Compensation Rates (New Rates 2004)

281

Rep. Riley

Question: Are there different rates for other different types of organizations? For instance, a 401-C3; are there any discounts on those or does everyone have the same rate?

288

Malik

Response: I don’t know if non-profits have any preference. This can be addressed  in the next presentation by the lottery director.

299

Rep. Berger

Question: What are the decision points for retailer regarding tiers levels?

306

Malik

Response: Retailer can choose the different tier options.

325

Malik

Slide: Retailer Compensation (One View of Revenue)

341

Malik

Slide: Retailer Compensation (Another View of Revenue)

367

Malik

Slide: Retailer Compensation

RECESS

2:00 p.m. Reconvened at 2:15 p.m.

414

Malik

Slide: Lottery Expense Percents

450

Dale Penn

Begins  overview presentation (Exhibit 2)

477

Penn

Slide: Mission Statement

TAPE 11 SIDE A

40

Penn

Slide: Organizational Structure. Mr. Penn provides his background.

66

Penn

Slide: Key Constitutional Changes

72

Penn

Slide: Distribution of Lottery Funds as directed by the OR Constitution and Legislature (pie chart)

83

Penn

Slide: Game Development

92

Penn

Slide: Planning/Budget Process

110

Penn

Slide: FY04 Revenue and Expense Distribution (Traditional Games)

117

Rep. Boquist

Asks Director Penn to define what transfers to the state are? There is a difference in percentages between Mr. Malik’s presentation and Mr. Penn’s.

121

Penn

Response: Mr. Malik’s discussion concerned net proceeds of both traditional and video games.. Prizes are taken out of all sales, resulting in the net revenue. Out of that net comes overhead for the lottery as an organization, specific expenses such as printing tickets, overhead expenses, retailer compensation system, and what is left over is transfers to the state.

149

Penn

Slide: FY04 Revenue and Expense Distribution (Video Lottery)

167

Rep. Berger

Clarifies that Mr. Penn’s slides are for the fiscal year; Mr. Malik’s are for the biennium.

180

Penn

Slide: Contingency Reserve and Administrative Savings

215

Penn

Slide: 05/07 Capital Requirements

241

Penn

Slide: Update of OR Lottery Audits

258

Penn

Slide: Forecast 05/07

357

Penn

Projects a 5.4% increase for the next biennium for revenue transfer, primarily in the video lottery market.

384

Penn

Slide: 20 Years of Doing Good Things for OR (from 1985-2005)

TAPE 10 SIDE B

049

Rep. Olson

Question; What is the percentage of gambling treatment funds?

051

Penn

Response: It is currently 1%.,however, it hasn’t always been a 1% appropriation. A letter from the Lottery Office will be sent soon to the governor and the committee requesting that the 1% be a dedicated amount from the lottery transfers.

070

Olson

Question: Is there research or a study nationwide as to what the impact of problem gambling and line games might be?

072

Penn

Response: Oregon has a very good record of treating problem gambling. Treatment funds go toward research and getting the message out about problem gambling—public presentations, newspaper and television ads, and giving the 1-800 number to seek help.

094

Rep. Boquist

Question: Does the lottery commission have the experience to launch video lottery?

103

Penn

R: Currently, the lottery is generating sales of $9 B, and video lottery represents 1/9 of increased revenue ($1 B). In case the video lottery is not approved, we began testing new line games in the Portland area that can get out in the field by July 3, and the results of that research are very important to us. We are confident that the  [video] game can be in the field by July 3 (beginning of fiscal year). Other issues  include a retailer network that is enthusiastic about the new games and willing to sign up for the new games.

144

Rep. Boquist

Asks about why the comparison was used with West VA.

155

Penn

Response: used West VA because they have a similar retailer network to Oregon’s in line games.

186

Rep. Komp

Q: Is there a strategic plan on-line or is there somewhere where we can look at your action steps and how you are going to accomplish all the goals stated.

195

Penn

R: Not on the lottery web site at this time, but it is in the handouts provided. (Exhibit 3)

211

Paul Warner

Committee Administrative announcements

255

Chair Galizio

Meeting Adjourned at 3:00 p.m.

Tape Log Submitted by:

Reviewed by:

Kristi Bowman, Committee Assistant

Kim Taylor James, Committee Coordinator