Wyoming Lottery Board obtains $1 million loan, good interest rate

Powerball Jackpot File | AP

 

Powerball lottery forms are displayed at a story in San Antonio

 

on Aug. 7.

 

The Wyoming Lottery Board chose locally owned Jonah Bank for its first leg of financing to get such games as Powerball and Power Play into the state.

The $1 million, 1.75 percent interest, short-term loan marks a high point for the board. Board members didn’t specify the length of the loan.

With the start-up cash in place to establish the Wyoming Lottery Corporation, the board announced the hiring of the Cheyenne law firm Hathaway and Kunz as its legal counsel during a teleconference Thursday. It will now have the ability to hire a CEO and lottery vendor — a company hired to furnish retail stores with the games.

The nine-member board appointed by Gov. Matt Mead is a quasi-governmental organization that began to assemble the Wyoming Lottery Corporation in July. State law prohibits the corporation from using any state money, and members have used their own time and cash to get the games up and running by their target date of January.

The loan not only ensures that board members will be reimbursed, but it allows them to bring the budget to life. Four CEO candidates are scheduled to be in Cheyenne next week to interview for the job. Meanwhile, the board is looking at two high-profile properties in downtown Cheyenne to use as the lottery’s home.

The CEO candidates include ones from other lotteries and others who work in the industry. Little is known about them. The board has kept their names under wraps for fear the candidates could face retribution if their current employers discover they are looking for another job.

Lottery board Vice Chairman Barry Sims said the board expects to name a CEO by Sept. 1.

The board said Jonah Bank offered the lowest interest rate among the six Wyoming-based banks that submitted bids.

Banker and lottery board member Ross Newman was floored by the rate.

“The rate that we’re borrowing money at astounds me,” he said.

The board may be able to get an even better deal on the loan than what it’s currently receiving. A federal tax exemption may be available to the board on the interest it pays because of the Wyoming Lottery Corporation’s status as a quasi-governmental entity. The exemption would reduce the cost of the loan by a third, Newman said last week during a board meeting.

The board is waiting to hear a decision on the exemption from new legal counsel.

The loan and next week’s CEO interviews are highlights for the board, but there are still many decisions to be made.

The board has yet to outline whether the CEO and other lottery corporation staff will be covered under the state’s retirement plan. The state has already approved eligibility for lottery employees. But board members are hesitant to grant state benefits to lottery employees because the program is generous and lottery officials are not considered state employees, Sims said.

It’s well known that state employees seldom get boosts in pay, but for lottery employees it will be different. There will be annual bonuses and raises for them, Sims said.

Health benefits aside, the state contributes about

12 percent to employee retirement benefits, Sims said. State statutes allow for a reduction in retirement benefits, so the board can reduce the amount contributed if it wants to use the state-run plan, board member Dave Bonner said.

“From where I am sitting, I need to have more dialogue about this,” Sims said. “I don’t know if this is automatic that we want to be a part of the Wyoming Retirement System.”

Sims said the board might want to look into lowering the lottery corporation’s contribution toward the state retirement plan, if it chose that option. The board said it will look into hiring private companies to offer 401(k)s and other benefits.

There are fears that CEO candidates could be scared off if there isn’t a clear plan for benefits during the interviews. The board still doesn’t have a definitive medical plan for lottery employees.

“My worry is that if we bring in a CEO without health care, how would that play?” board member Gerry Marburger said.

Board members say they will have a medical and retirement plan framework for the CEO candidates when they arrive next week.

One of the biggest hurdles in front of the board is hiring investigators to conduct background checks on lottery employees. Whether it’s the CEO or employees of a convenience store, state law requires fingerprints and criminal history searches be conducted.

States such as North Dakota and Nebraska that have lotteries attached to government generally rely on state-run departments to collect information from retail employees and lottery officials. The Wyoming board can’t rely on the state to conduct background checks because the lottery receives no state funding.

The board tried to broker a deal with the Wyoming Department of Criminal Investigation to conduct the checks, but DCI doesn’t have enough staff to cover the 400 retail stores that will sell lottery games, according to board members.

The board is looking into hiring two private investigators with law enforcement experience to conduct the checks.

http://billingsgazette.com/news/state-and-regional/wyoming/wyoming-lottery-board-obtains-million-loan-good-interest-rate/article_18b5586d-40cc-52d9-9ed1-ff54c0ec8d4f.html








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