A conversation with Shaheen on the Mississippi Lottery

By ANTHONY WARREN,

Tom Shaheen was recently named president of the Mississippi Lottery Corporation, the company that will oversee the implementation and operation of the state lottery. Shaheen comes to the Magnolia State after having helped to establish lotteries in Florida, Texas, Georgia and North Carolina. He spoke to Sun Senior Staff Writer Anthony Warren about his role and efforts to set up a lottery in the state.

How are things going with the lottery right now?

“We’re moving along on pace now. The key things that had to be done when I got there was get proposals on the street for vendors. One proposal was for a vendor to be a printer of instant tickets, and one was for a vendor to provide the hardware, software and telecommunications pieces for processing tickets for Jackpot-style games. Basically, there are three major vendors in the world that do this, with a fourth one that is coming on.”

 

Have the vendors been hired?

“The bids were on the street; they came in and we are evaluating them. We got two vendors to submit bids for Jackpot-style games, such as Powerball and Mega Millions, and two for printing instant tickets.”

What are the instant tickets?

“Those are the scratch-offs, the ones that will be sold for $1, $5, $10, $20, that you buy and scratch off. It may tell you to match three symbols to win a prize. It could be any prize, $5, $500, it’s random.”

When will the corporation decide which firms to hire?

“We have an evaluation committee of three people who are reviewing the proposals. They will make a recommendation to me based on the requirements in the bid, and once I review them, I will take a recommendation to the board of directors. I anticipate this will happen in the next 10 to 14 days.”

What tickets will people be able to buy first, Powerball or scratch-offs?

“Scratch-offs will be first, with the target date of starting those games on December 1. Initially we will distribute four different games at different price points. A few weeks after that, we’ll introduce four more games. We’ll gauge the sales and two weeks after (the second round of games are introduced) we’ll introduce four or five more games. The goal is to get it up to 25 games by the end of our fiscal year. But we’re going to roll them out gradually.”

When is the fiscal year?

“Our fiscal year runs from July 1 to June 30.”

Why roll the games out gradually? Why not just introduce all 25 or so at once?

“Because all of this is so new, especially to retailers and those consumers who are not knowledgeable of the lottery. They (the retailers) have to have an understanding of the games, so if a customer asks them how to play they can help. The goal is to not flood the market and create frustration. We want to make it easy to understand.”

One more question on scratch-off tickets. What will the prize limit be?

“It will be different for every game, depending on the game and the price of the ticket.”

Who can sell the tickets?

“Any retailer that meets the requirements of the lottery act. They have to have a criminal background check, a tax check and a financial credit check. In addition, we require that they cannot be in business to sell lottery tickets only. They have to offer another service.”

If I’m a plumber, then, I can sell tickets?

“You have to have a storefront. You can’t sell them out of your truck. You have to be in a retail service.”

Once a retailer is approved, are there any special requirements?

“Retailers have to have a bank account for lottery sales only, and we require that account to be a trust for the Mississippi Lottery Corporation. They also have to set up that account so the corporation can take out money electronically. The retailers also have to have a bond, because they’ll be holding state money. The bond is $8,000 per location. They also have to pay an application fee, $80, and $15 for each additional store.”

Will the retailers have to have money in place before the lottery begins to pay scratch-off winners?

“They will need to have money in the store. If they sell a high volume of tickets, the lottery money they take in will be used to pay the prizes. They can pay cash prizes up to just under $600. They don’t have to pay cash and can pay with a check, but most retailers prefer to pay cash. Any amount over $600 has to come to the lottery corporation headquarters. They can bring their tickets to the lottery headquarters, fill out the application on the web and mail it in with the requisite ID. The state requires taking out income taxes on any prize over $600. The federal government requires taxes on anything over $5,000.”

How many retailers have applied so far?

“Around 200 as of 10 o’clock this morning. There’s no cap, or limit, on the number of retailers that can participate. Anybody who passes the background checks and can complete the application process is eligible.”

How long does the application process take?

“It’s too early to tell. It depends on how accurate the information is that’s submitted by the retailers, and whether they filled out their applications correctly. If it’s all accurate and filled out correctly, it shouldn’t take long.”

Is there a sense of urgency now to get retailers signed up to participate?

“If they want to start selling before or on December, we urge retailers to get their applications in now, because when more start coming in, it will take longer to process them. If they get their applications in after October 1, there is no guarantee that they’ll be approved by December 1.”

When do you hope to roll out Powerball?

“We anticipate mid-February to early march. We’ll start working on that process in October, once we have the instant ticket process moving. We have been approved by the Multi-State Lottery Association to sell Powerball and Mega Millions tickets, because those are not state games.”

Powerball and Mega Millions won’t be run by the state, and the state won’t set those jackpot amounts?

“They’re not Mississippi-centric games. When you see Powerball jackpots getting big, it’s not just one state, but everywhere (the tickets are sold). As a member of the association, I am on the board of directors that makes the decisions for the games, so we do have a say, but we don’t set jackpots independently.”

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