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Heavily Redacted Document

Here is a clip of a reporter leafing through the bid by GTECH to take over certain functions of the Hoosier Lottery. It was made public to reporters but has been heavily redacted to protect "trade secrets." GTECH won a 15-year contract earlier this month to increase lottery revenues. Video by Niki Kelly, The Journal Gazette.

Niki Kelly | The Journal Gazette
Both bids to privatize the lottery have been heavily redacted.

Lottery bids made public … but unreadable

– Hoosier Lottery officials made public the two bids to take over key operations of the system.

But the nearly 1,700 pages of documents are so heavily redacted that Hoosiers still have no idea how the new manager plans to hit lofty revenue targets. The bids also weren’t placed online for citizens to read. They are only available in a downtown Indianapolis conference room.

And despite finalizing the 15-year contract with GTECH Indiana LLC on Friday – and sending out a news release about it – the lottery has yet to release that agreement.

“There is public access and open government in theory, but this is reality,” said Julia Vaughn, policy director for Common Cause Indiana. “Unfortunately, more and more, I hear from citizens that agencies will turn over documents but they are blacked out to the point that it’s really meaningless. The state needs to rethink this.”

Common Cause is a nonpartisan advocacy group pushing for accountable government and citizen involvement.

In comparison, when Indiana leased the Indiana Toll Road – a much more complex transaction – reams of non-redacted documents were posted on the state website for review and are still accessible today.

Rhode-Island based GTECH promised the state $1.76 billion over the first five years of the contract. The company earns bonuses if annual targets are met and must pay the state if they aren’t.

The Hoosier Lottery brought in about $227 million to state coffers last year, and expects to generate about the same next year.

GTECH’s target for fiscal year 2014 is $256 million; and the number rises to $410 million in 2018.

Gov. Mitch Daniels said Tuesday he would be willing to talk with lottery officials about whether GTECH and competitor Scientific Games went too far in their redaction of so-called “trade secrets.”

“I’m in favor of folks knowing all they can,” he said. “The more information folks have, the more obvious it will be that this was just a smart management move.”

In early October, the state lottery commission approved hiring GTECH to assume day-to-day administration of the Hoosier Lottery’s marketing, sales, distribution and customer service operations effective in February.

The five-member lottery commission will still maintain control over all significant business decisions and will have the authority to approve GTECH’s annual business plan each year before it can be implemented.

That business plan was a large part of the bid, and lottery officials said earlier this month that it included expanding the customer base by selling tickets at big box retail stores.

But those plans and more have been redacted from the documents available for public review, including how the games themselves would be improved and marketed.

Some of the pages that were left untouched included statistics comparing the Hoosier Lottery with other states and various biographies of GTECH employees.

Also, the bid promised to name Fort Wayne community leader Ian Rolland to its advisory board, along with Ball State President Jo Ann Gora and former professional basketball player George McGinnis.

Some documents involving enhanced lottery gambling were not redacted.

While the lottery commission asked for a base bid largely involving the current lottery structure, bidders were encouraged to submit an enhanced bid describing additional options that may be implemented in the future.

GTECH, for example, said it could bring in additional $1.1 billion over the five years by adding online sales, monitor games such as Keno and video lottery terminals.

The bid plan for video lottery terminals was very specific – suggesting they would be open 18 hours a day, at least five terminals per location for upwards of 10,000 machines around the state. The retailer commission would be 19 percent of the net machine income, and the documents even outline additional lottery staff needed.

nkelly@jg.net

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