UPDATE 4: Bank of the Ozarks Gets Lottery Account

The Arkansas Lottery Commission has selected Bank of the Ozarks to handle the lottery banking business.

The lottery is expected to bring in about $400 million annually. The commission on Wednesday approved an intent-to-award the banking contract to Bank of the Ozarks over Centennial Bank of Little Rock, Regions Bank of Birmingham, Ala., Bancorp South of Tupelo, Miss., U.S. Bank of Minneapolis, Minn., and Bank of America of Charlotte, N.C..

Bank of the Ozarks is one of the largest clients of The Communications Group, a Little Rock advertising agency. The Communications Group won the Lottery Commission's advertising account Aug. 5. Several advertising agencies that submitted proposals for the lottery business said they were unhappy with the procurement process.

Susan Blair, spokewoman for Bank of the Ozarks, said the bank and The Communications Group didn't collaborate on their proposals to the Arkansas Lottery.

"It absolutely was coincidental that we both were successful in being recommended," Blair told ArkansasBusiness.com.

Lottery ticket sales are expected to begin Sept. 28. Lottery proceeds will fund college scholarships.

In the absence of bids from local banks to serve as regional claims centers, the commission will open and operate them, placing one in each congressional district. Lottery director Ernie Passailaigue said the sites would be operational by Sept. 28. Cities being considered are Springdale (Third District), Jonesboro (First District), Warren and Camden (Fourth District).

The commission has planned all along to open a claims center at its Little Rock headquarters, which is expected to be opened in the Union Plaza building downtown by Sept. 1.

Commission chairman Ray Thornton acknowledged disappointment in the absence of bids from local banks to serve as claims centers, but he noted that it didn't hurt to try. Passailaigue previously told commissioners that allowing local banks to serve as claims centers would save the commission more than $300,000 a year. But the deadline for banks to bid on the business passed Tuesday with no bids submitted.

The regional claims centers will handle transactions between $500 and $200,000. Local lottery retailers would handle transactions under $500.

Passailaigue told commissioners Wednesday that 200 retailers were set up and ready now for lottery business, and that about 600 more were almost ready. He said when the lottery launches next month, there would be between 1,500 and 1,800 participating retailers.

In addition, Passailaigue said roughly 20 lottery sales representatives had been hired, and that they would serve as the lottery's "foot soldiers" in the state. Also, he noted the work between commission staff and the state Department of Human Services to implement a state program for problem gamblers. Passailaigue said an unclaimed prize fund would be established to benefit the program.

In other business, the commission voted to award the quality-assurance testing contract to the Patel Group.