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Lottery follies: Oregon’s ‘Joe Camel’ site causes ruckus; Intralot sues Illinois

TAGs: Camelot, GTech, Illinois, Intralot, Northstar, Oregon Lottery, Scientific Games

intralot-illinois-oregon-lotteryMinnesota isn’t the only state currently grappling with issues over state-run online lotteries. Three top officials at the Oregon Lottery resigned last week following revelations that the outfit had been attempting to launch an online ‘second chance’ option for losing scratch card tickets aimed at a younger generation of lottery players. Marketing director Carole Hardy, retail ops manager Tim Eaton and public affairs manager Mary Loftin all submitted resignations last Wednesday (16th) following The Oregonian’s publication of the online lottery plans.

The online project, dubbed “The ORcade,” was conceived in 2009, after Lottery ticket sales had plateaued. Working with Lottery contractor GTECH, Hardy first came up with a concept dubbed “Not Your Father’s Lottery” involving smartphones, video poker and other ‘slot-like’ games. This concept was ultimately shelved in favor of the ‘second chance’ ORcade project, but all work stopped after then-Gov. Ted Kulongoski objected to taking the lottery online. Work on the site resumed in early 2011 after new Gov. John Kitzhaber was sworn in, but Lottery Commission officials were apparently kept in the dark.

The Orcade was to be launched this month, and Lottery officials had allocated $2.3m to help market the new offering. But following The Oregonian’s coverage, Gov. Kitzhaber suddenly developed qualms over what his spokesman described as the ORcade’s “Joe Camel” graphics and concerns that they might have extra appeal for underage players. Despite the timing, Kitzhaber’s spokesman says he was “not aware of any connection” between the media brouhaha, the governor’s concerns and the three Lottery execs’ resignations. (Sheer coincidence, we guess.) And none of this means the online plans are completely off the books. As Steven Ungar, chairman of the Oregon Lottery Commission, observed: “Whether it’s the ORcade or something else, the Lottery, to be relevant, to be successful, must keep up with technology.”

In other state lottery snafus, GamblingCompliance.com reports that Greek lottery operator Intralot has filed suit to prevent the state of Illinois from disseminating a probity report Intralot claims was unlawfully compiled. In 2009, Intralot was one of the companies bidding to become the Illinois Lottery’s private manager. When that contract was awarded in 2010 to the Northstar Lottery Group (incl. GTECH and Scientific Games), both Intralot and UK operator Camelot formally protested what they perceived was an unfair contest. Intralot claims that John McCaffrey, then-general counsel to the Illinois Department of Revenue, subsequently warned Intralot that a probity report would be compiled and released to the media if Intralot didn’t back off its protest.

But Intralot didn’t blink, so the report was compiled and, as Intralot alleges, McCaffrey directed local reporters on how to access it. Intralot claims the report contains “inflammatory and untrue allegations” regarding (a) the company’s operational history in Bulgaria and South Africa, and (b) executives at Intralot’s Greek mothership. Intralot further alleges that the claims contained in the report could jeopardize the company’s ability to win similar contracts in other states. Intralot is seeking damages from McCaffrey for discrimination and defamation.

In July 2011, Illinois Auditor General William Holland released his own report that called attention to “significant deficiency and noncompliance” surrounding the bid process, as well as his belief that the Department of Revenue “utilized the probity investigation … by releasing it to the public, due to the fact that the vendor had protested the award of the contract.” While Holland didn’t take issue with the probity report’s findings, he noted that no similar report had been compiled on Camelot, despite the UK outfit making it further into the bid process than Intralot. Department of Revenue officials have denied that there was any impropriety involved in the Illinois Lottery bid.

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