Lottery organizers host training with potential vendors
Date posted: April 29, 2014
SHERIDAN — Wyoming’s economy is gearing up for some big changes, thanks to a little piece of legislation passed in 2013. The Wyoming Lottery Act not only provided for the possibility of Wyoming participating in state or national lottery games, but opened the door for limited types of other betting and games of chance already operating in Sheridan.
With the structural foundation of the Wyoming lottery corporation established, the operation is now in the initial phases of recruiting potential retailers to sell tickets for two national lotteries: Powerball and Mega Millions.
WyoLotto CEO Jon Clontz said both games are operated nationally by Intralot, a global gaming vendor that will provide software, hardware and support for vendors and game operators.
Clontz is the former deputy director of Oregon’s lottery and has secured a $1 million loan from Jonah Bank for startup operations and initial prize money.
This morning, potential vendors in Sheridan attended a training session to go over how lottery tickets will be sold. The event is also an open invitation for venders to formally express interest in being a designated ticket-selling location.
“The potential vendors will have to undergo a background investigation for disqualifying issues,” Clontz said, indicating an example of a disqualifying event might include a past conviction for financial crime. “After they pass and are selected, we have to train them and get the machines out there.”
Clontz also emphasized a key focus of the series of training events taking place this and last week around the state are opportunities for potential vendors to contribute ideas to the process.
“When we’re done and have compiled our feedback, we’ll draft a final contract to put in front of the board,” he said.
Clontz declined to indicate how many locations in Sheridan will be selected to sell lottery tickets, but he indicated the lottery’s strategy is to keep things novel, and there would be between 400 and 450 locations to buy lottery tickets statewide.
Clontz also said the WyoLottery has created eight jobs associated with lottery administration and there’s a potential for as many as 40 technical support positions to service retailers around the state.
Wyoming’s lottery was officially accepted into the Multi-State Association of Lotteries via a vote of the organization’s board last week. MUSL Spokesperson Chuck Strutt verified the vote to approve the state’s membership was unanimous among existing members, with the exception of Nebraska and North Dakota.
“The bordering lotteries often must consider protecting their border retailers and also their beneficiaries of lottery profits,” Strutt said, adding that Wyoming’s other border states, Montana, Colorado and Idaho, voted in favor of the inclusion.
“I was surprised by their no votes, but I understand why,” Clontz said. “They don’t want to lose the business.”
The monetary impact of lottery ticket sales represents an unprecedented possibility of retaining Wyoming dollars in the state — dollars that would have previously been passed across state lines by betters feeling lucky enough to drive a few minutes to purchase a ticket in a neighboring state. Montana Lottery Marketing and Sales Director Jo Berg said Montana’s representative voted to allow Wyoming into the association and further said she doesn’t anticipate Wyoming’s new lottery will have a dramatic impact on Montana’s economy.
“We believe it’s going to be only a small impact,” she said. “We only have small locations along the Wyoming border.”
Berg added that many people from Wyoming will likely still travel to Montana for shopping, and she’s doubtful their buying habits are going to change that much.
“We also offer other lottery products people from Wyoming might be interested in purchasing,” she said, referring to scratch cards, Montana Cash and EZ Play games offered only across the Wyoming border.
Berg’s statements seem to be in direct contrast to Clontz, who estimates the first year of WyoLotto tickets will bring in $14-$17 million after retailers keep 6 percent of sales profits. By contrast, the Nebraska Lottery reported $161 million in sales during the 2012-2013 year.
The institution of Wyoming’s lottery actually creates a potential reversal of that situation since Utah doesn’t have a lottery. Clontz said it’s likely people who live in areas near Salt Lake City might make the hour-long drive to Evanston to pick up a ticket, thus drawing outside money into the Cowboy state. All other Wyoming border states already participate in lotteries.
Though the lottery is a private corporation, it is set up in a way that provides the potential for significant financial contributions to the state. Clontz said after paying out operational costs and prizes, the first $6 million generated by ticket sales goes to municipalities within the state.
“Anything above that goes to the Wyoming land funds, which funds education,” Clontz said, referring to the Permanent Land Fund’s Common School Account.
“Just like any business, you don’t put one on every corner and saturate the market. That doesn’t work,” he said. “The retailers will have to show they already have foot traffic, show us receipts. Then, we’re going to put machines where they make the most sense and will generate the most sales.”
“This is not simpler technology, and we started from scratch,” Clontz said. “To be this far in six months is remarkable.”
Clontz said right now, the team is aiming to sell their first tickets in Wyoming in August.
Another new betting provision that’s already underway in the state of Wyoming is historic horse racing. In Sheridan, Wyoming Downs is located inside The Rails Brews and Cues on Broadway, and features a set of 28 machines with a database of approximately 300,000 historic horse races.
A better is able to review statistics of each horse, though names and dates are not displayed, and place a wager. After the bet is placed, the player views the last few seconds of the race and any winnings are distributed.
Sheridan’s Wyoming Downs Manager Chris Macha said it would be impossible for even a skilled better or horse racing aficionado to identify which race or horse is being described in the preliminary information provided before betting occurs.
The platform combines video gaming with traditional race betting, and can also be used to broaden participation in live races. Wyoming Downs in Sheridan will offer live betting on horse races taking place at the track in Evanston during this year’s racing season. The availability of off-site bidding has created the largest purse structure for the races in state history.
Though Wyoming Downs has been operating in Sheridan for about five months, the business held its grand opening Friday. This weekend, patrons will be invited to place live bets on the 140th Kentucky Derby.
Wyoming is the third state in the nation to allow electronic betting via a video game-like machine for historic races at off-track sites, and can include other races, including dogs.
Macha indicated that like the WyoLottery, there’s a cap on how much profit the gambling business can keep.
“It’s not like they’re playing against the house like you are in Blackjack or Poker,” he said.
Wyoming Downs also has locations in Evanston, Laramie and Cheyenne, and boasts 3,000 unique visitors to each of the facilities combined.
Wyoming’s new lottery legislation stops short of authorizing “scratch to win” tickets. Clontz said the intent of the bill, at this time, was to exclude types of gambling that offer immediate gratification, which are more likely to incite gambling addictions.
Basic math suggests that with Wyoming joining in on national lottery games, the odds of anyone winning are now lower, given that more people will be pining for the same number of big purses. However, the next plan of action for the WyoLottery will be to set up a statewide drawing. While the win will be smaller, the chances of winning will go up.
“There are, what? 580,000 people in Wyoming? Of those, how many are of purchasing age?” Clontz said, illustrating that Wyoming’s small population creates a unique dynamic when considering the impact it has on local and national bets.
“You’ll see more winners when we introduce local and draw games, which the board has authorized,” Clontz said. “Then, they won’t be competing with other states.”