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Northstar Group and Camelot come before the public as decision day nears

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The Northstar Lottery Group and the Camelot Group made their respective cases Wednesday for why each bidder believes it is best qualified to become the first-ever private manager of the Illinois Lottery. Presentations from the two finalists came during a public hearing just one week before Gov. Pat Quinn is to select one of the two bidders to manage the Lottery. His decision, if he opts to make one, will be based largely on a recommendation from an Illinois Lottery evaluation committee that has been analyzing the bids for the past several weeks. The committee is expected to submit its recommendation to Quinn on Friday.

Illinois Lottery acting superintendent Jodie Winnett set the stage for the hearing, calling the private management contract a breakthrough deal. "This is the first time a deal of this nature has been struck in the United States. . .all eyes are on Illinois," said Winnett.

The entire private management bid process, however, has come under intense media scrutiny in recent days, as questions have been raised about why only three entities from around the world ultimately submitted bids for the private management contract and why one of those, Intralot, was immediately dropped from contention -- leaving just Northstar and Camelot.

Questions also have focused on the Northstar consortium itself, comprised of three vendors that already work with the Illinois Lottery: Gtech, Scientific Games and Energy BBD0/Chicago. Respectively they supply technology, games and advertising to the Illinois Lottery. These vendors' close ties to the Lottery have left some observers wondering whether it would be prudent for the Northstar consortium to wind up, in effect, managing themselves. That nagging question was never addressed by Northstar representatives or by Winnett at Wednesday's public hearing.

Perhaps to drive home a major point of differentiation from Northstar, Camelot, which has managed the United Kingdom National Lottery for the past 16 years, repeatedly pointed out it is "vendor agnostic," meaning it is beholden to none of the vendors that currently work with the Illinois Lottery. "We can start from scratch bidding contracts," noted Camelot CEO Dianne Thompson.

Northstar's presentation was perhaps most notable for the questions it raised about the current marketing of the lottery by one of its consortium members, Energy BBDO, the current ad agency of record for the Illinois Lottery. Northstar's own research indicates one of the Illinois Lottery's big problems is the public's low awareness of the games available to play. In her remarks at the hearing, Energy BBDO CEO Tonise Paul said Northstar would take a new marketing tack to emphasize the fun, positive aspects of playing lottery games regularly. The advertising tagline she introduced was "Possibilities. Every Day."

Camelot was surprisingly blunt about problems the Illinois Lottery must address. Camelot Illinois CEO Jeff Perlee said the Illinois Lottery has too many of its retailers concentrated in low-income neighborhoods, a situation that would seem to encourage lottery playing among those who can least afford it. Perlee even went so far as to call the Illinois Lottery "one of the most regressive" in the United States.

In the U.K., Camelot has successfully focused on attracting more affluent players and has introduced a loyalty program to encourage more frequent participation. Smart marketing, Camelot executives said, has helped the company get 72 percent of United Kingdom residents to play the Lottery, while the best Illinois has done is 49 percent participation.

Quinn is to announce the winner of the private management contract on Sept. 15.

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Lewis Lazare has written the Media Mix column for the Chicago Sun-Times for the past seven and a half years.

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This page contains a single entry by Lewis Lazare published on September 8, 2010 4:49 PM.

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Two Illinois Lottery private management contract bidders await their fate is the next entry in this blog.

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