Lottery in Missouri faces contract issues
One of the most important contracts of the lottery might be in jeopardy if it gets challenged by the company that runs ticket sales.
US.- Missouri could collect less money from its lottery if the company that runs the statewide network of ticket sales challenges in court the current contract. If the company gets penalised for breakdowns, the state could fall short in some funds.
Post-Dispatch released a review that said that the proceeds don’t directly fund social subjects such as public schools even when the Lottery collects money for penalties. Instead, the money goes back to the Lottery’s marketing budget to boost future sales, Lottery Post reported.
Missouri Lottery’s contract with IGT establishes that penalties need to be assessed if there’s a problem with the lottery ticket distribution system. The US$16.1 million per year contract that was signed three years ago explicitly said that the penalties assessed can go from major system problems to minor issues. However, there are some concerns around the contract.
Lottery spokeswoman Susan Goedde said: “If the Lottery were to assess the maximum potential liquidated damages at every opportunity without regard to the circumstances of the loss in question, it might run the risk that the validity of any particular assessment — or worse, the validity of the applicable liquidated damages provision in the contract — would be challenged in court, and that the Lottery might not win.”
Whilst the money that the Lottery has is unclear, it has been noted that the amount collected was higher than what actually charged in some instances. During a case in 2016, the lottery asked for penalties worth US$1.1 million, but the company said that a US$131k fine was more appropriate. The deal ended with IGT providing 700 self-service lottery dispensing machines and a mobile app to buy tickets on smartphones, among other small things. Nevertheless, it is uncertain if the deal was good for Missouri or not. Lottery officials still said that industry standards were followed when assessing the penalties: “I believe we have been aggressive in pursuing liquidated damages,” said Gary Gonder, the COO of the Missouri Lottery.
