Betsy market among first approved lottery retailers

By Thomas Wilson
STAR STAFF
twilson@starhq.com

   Christmas came early for Roger and Mary Forbes.
   As owners of Roger and Mary's Raceway Market on Broad Street, the Forbes' business is one of the first 27 independent retailers approved to sell lottery tickets in Tennessee.
   "Needless to say, we are tickled to death," said Forbes.
   The Tennessee Education Lottery Corporation announced Friday that 27 retailers had won final approval to become the first authorized dealers to sell lottery tickets in Tennessee.
   More than 3,000 convenience stores, gas stations and other outlets have applied to sell, said Kym Gerlock spokesperson for the state Lottery Corporation.
   "They were first ones who made who it through the process," said Gerlock. "We want to encourage people to get applications in as soon as possible."
   Lottery officials are also finalizing approvals with corporate retailers including Roadrunner Markets that have applied with multiple locations. Of the retailers approved Friday, four were located in Memphis, three were in Nashville, and two were in Knoxville. The only other Upper East Tennessee location of the retailers approved Friday is the Apple Shed located on Fort Henry Drive in Kingsport.
   Representatives of Scientific Games International were installing satellite equipment at Raceway Friday afternoon. After the lottery systems are installed, Lottery officials will provide training next month for retailers to learn how to operate the lottery equipment. Forbes said he had submitted his application immediately after the state began accepting them.
   "I know we're not going to be the only one in Carter County selling lottery tickets, but it sure is an honor to be the first one," said Forbes, who became owner of the market in August.
   The draw of selling lottery tickets is a lucrative prospect for businesses. Retailers receive a commission of 6.5 percent on lottery sales made from their stores. An applicant must pass criminal background checks as well as credit checks. An applicant must be in good standing with the Tennessee Department of Revenue on existing tax records.
   The Lottery Board of Directors approved in November the selection of the GTECH Corp. as the preferred vendor to supply retailers with the computer equipment and services necessary to offer games in which players pick numbers prior to televised drawings. Scientific Games International Inc. was selected by the board to supply instant or "scratch off" lottery tickets.
   Based on initial annual revenue projections of $900 million, GTECH's contract could be worth $10.5 million in the first year. Scientific Games' contract could be worth $5.6 million. The total value will depend upon sales growth over the full terms of the contracts.
   GTECH, headquartered in West Greenwich, R.I., handles about 63 percent of the "online" lottery business in the nation. Online is a lottery-industry term that refers to retail computer terminals linked to a telecommunications network. GTECH handles 280 million transactions daily, and supplies equipment to lotteries in more than 40 countries around the world.
   Scientific Games International, owned by New York-based Scientific Games Corp., supplies 65 percent of instant tickets in the United States. Since 1974, the company has delivered more than 90 billion tickets to retailers and players.
   Both companies won 7-year contracts that will be based on a percentage of the Lottery's sales. GTECH will earn 1.24 percent of all lottery sales. Scientific Games will earn 1.139 percent of instant sales.
   Gerlock said Lottery officials were still on the hunt for property to set up district offices in Memphis, Chattanooga, Knoxville, and Northeast Tennessee. Satellite locations will redeem player prizes, sell tickets and handle retailer needs.
   Lottery officials have set a target date of Feb. 10, 2004, to sell the first lottery game ticket in Tennessee. The Lottery's immediate goal is to raise $88 million by July 1 to fund scholarships for 65,000 students attending Tennessee colleges and universities next fall.
   State lawmakers have tussled over the academic standards determining eligibility for students receiving scholarships funded by lottery dollars. Lottery scholarships are expected to be awarded beginning in spring 2004.