On Tuesday, January 14, 2014, the State Administrative Board for the State of Michigan (“Board”) approved a contract between the Michigan Lottery and Pollard Banknote Limited (“Pollard”) for the provision of Internet and mobile gaming services.

The Michigan Lottery selected Pollard on November 25, 2013 to assist in developing mobile and Internet platforms for patrons to play lottery games via the Internet. Pollard, which submitted a joint proposal with its subcontractor NeoGames Network Limited (“NeoGames”), was one of five groups that submitted responses to a Request for Proposal issued by the Lottery on January 8, 2013 and received the highest combined score from the Lottery’s evaluation committee. The other groups included GTECH Corporation, Scientific Games, Incomm, and NDeX.  Proposals submitted by the companies Incomm and NDeX were considered “non-responsive” and were not considered in the final evaluation by the Lottery.

In its recommendation, the Lottery’s evauation committee stated that Pollard and NeoGames “have deep experience in the implementation and operation of iLottery systems and games. [Pollard] provides instant game products and services to more than 50 clients worldwide and has nearly 30 years of experience in the industry. NeoGames has more than 40 different clients worldwide that utilize its internet games, internet gaming platform, and operational services….[Pollard], along with NeoGames, illustrated a solution and past experience that indicates both feasibility and flexibility of the proposed iLottery system.” According to a press release from the Lottery on the matter, the contract is valued at approximately $23.2 Million over the first four years, based on a projection of the 19.6% percent of gross profits from digital sales that Pollard is set to receive under the terms of the agreement.

According to the Michigan Lottery, offering its existing games online will result in anticipated growth in sales. Based upon figures from other states, the growth is estimated to increase contributions to the state School Aid Fund by nearly $480 million over the next eight years.

Notably, legislation was introduced in the House and Senate to ban online lottery ticket sales in April of 2013, but neither bill has made it out of committee. (See House Bill 4531and Senate Bill 0294).

 

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