LITTLE ROCK — A proposal for lawmakers to hire consultants, without taking bids, to conduct a performance audit of the state lottery received reviews from two legislative panels on Thursday.

LITTLE ROCK — A proposal for lawmakers to hire consultants, without taking bids, to conduct a performance audit of the state lottery received reviews from two legislative panels on Thursday.


The legislative oversight committee on the lottery and the Policy-Making Subcommittee of the Legislative Council reviewed the proposed contract with Camelot Global Services, which is scheduled to be taken up by the full Legislative Council on Friday.


Under the contract, lawmakers would hire Camelot Global Services of Philadelphia for $149,500, plus reimbursement of travel expenses up to $20,000. Company officials testified that they expected to have a report completed in five weeks that would suggest ways to reverse the lottery’s declining revenues.


Sen. Linda Chesterfield, D-Little Rock, co-chairman of the Policy-Making Subcommittee, asked why bids were not sought for the project.


Sen. Jimmy Hickey, R-Texarkana, said Camelot has hands-on experience with lotteries, having run the UK National Lottery since 1994 and done consulting work for several lotteries in the U.S.


"The lottery, with the way that entity is set up, it’s very detailed, and there’s going to be very few individuals or other companies … out there that are going to understand the entire aspect of this business," he said.


Hickey added, "The amounts that are available for the scholarships are declining, and not only is this an attempt to turn this around, we are going to stop it and try to get this back where it needs to be."


The state Lottery Commission has been seeking a performance audit. It received bids for the project last month, but not from Camelot — though the company did ask for an extension of the deadline to submit bids, which was rejected.


Camelot Senior Vice President Richard Wheeler said the company considered submitting a bid but decided not to because the commission’s request for proposals "didn’t give us a broad enough scope to do a piece of work that we felt would be truly transformational."


Lottery Commission Chairman John "Smokey" Campbell III told reporters Thursday he did not know whether the commission would go ahead with its plans for a performance audit. He said he had no problem with lawmakers commissioning their own audit.


"They’re the boss," he said.


Lottery Director Bishop Woosley told reporters, "If there’s something that they come up that is something we can implement and we think will improve the lottery, I’m more than happy to do it."


Woosley also presented the oversight committee with a revised budget for the current fiscal year that lowers projected revenues to $78.3 million to reflect the cancellation of plans to launch monitor games. Legislation by Hickey that was passed during a special legislative session this year prohibits the lottery from adding monitor games until March.


Hickey noted that the budget included a 1 percent cost-of-living adjustment and merit bonuses of 1 percent to 3 percent for lottery employees.


"If I’m managing a business like this, yes, I try to pay my employees and pay them well, as long as things are doing good, but I wonder what is your reasoning for trying to up this with the declining sales that we’re seeing?" he asked.


Woosley said the commission wanted to provide the same pay increases to lottery employees that state agency employees are to receive, if funding is available. If the raises are not funded for state employees, lottery employees will not receive them either, he said.


"Just because the state does it, that doesn’t mean that your division has to," Hickey said. "I am concerned about that."


Camelot officials were asked about monitor games during the oversight committee’s hearing. They said their first impression of the Arkansas lottery is that it may not be ready for games like Keno.


Consultant Sam DePhillippo said that for the average lottery, draw-based games account for about 40 percent of revenue, but in Arkansas they account for just 20 percent of revenue — suggesting the player base to make monitor games profitable may not be there yet.


"If you don’t have that product developed, adding a monitor game is … putting the cart before the horse," he said.