STATE OF OKLAHOMA OKLAHOMA LOTTERY COMMISSION OFFICIAL MINUTES December 7, 2021 The Oklahoma Lottery Commission, established pursuant to the provisions of the Oklahoma Education Lottery Act, sections 701 et seq. of Title 3A of the Oklahoma Statutes, held a board meeting on December 7, 2021 at 1:30 p.m. The board meeting was held at the Oklahoma Lottery Commission headquarters located at 123 Robert S. Kerr, Oklahoma City, Oklahoma. In compliance with the Open Meetings Act, 25 O.S. § 301 et seq., the agenda for this meeting was posted at all main entrances and posted on the Lottery website 24 hours in advance of the meeting. AGENDA ITEM 1: Call to Order Chairperson Nevyle Cable called the meeting to order at 1:30 p.m. The roll of Board members was called to establish quorum. Board members present were: Ted Blodgett Nevyle Cable Scott Eisenhauer Jim Orbison Christy Rawlings Guy Sims Board members not present were: Tracy Yates Based on the result of the roll call, the Chair declared a quorum was present. Others in attendance were: Jay Finks, Executive Director Amanda Everett, Assistant AG Abby Morgan, OLC Mary Martha Ford, OLC Tiffany Mather, OLC Shelby Owen, OLC Ricky McCullough, OLC Jennifer Grigsby, Cabinet Secretary David Oakley, Legis Kirke Kickingbird, Hobbs Straus Adam McCrease, Cherokee Nation AGENDA ITEM 2: Announcement of filing of the board meeting notice and posting of the agenda in accordance with the open meetings act Mr. Cable asked if proper public notice was made regarding the December 7, 2021 board meeting, in accordance with the Open Meetings Act. Mr. Finks verified that all necessary steps had been taken to remain in compliance with the Act. AGENDA ITEM 3: Reading and approval of minutes Mr. Blodgett moved that the reading of the minutes of the September 21, 2021 board meeting be waived and approved as published and distributed. Mr. Orbison seconded the motion. The Chair ordered a roll call with the following results: Roll Call Vote: Yes: Blodgett; Cable; Eisenhauer; Orbison; Rawlings; Sims No: Abstain: The result was 6 votes in the affirmative, none opposed, and none abstained. The motion passed. AGENDA ITEM 4: Report of Audit and Finance Committee Mr. Blodgett reported on the Lottery’s financial outlook through November and indicated that the Lottery was on pace to exceed the FY22 fiscal appropriation of $61,000,000. Mr. Blodgett reported on two audits that were conducted since the last board meeting… * BKD Agency Risk Assessment – the OLC’s internal audit service provider conducted a comprehensive analysis of the agency’s risk profile to identify key areas for audit. While there were no “new” risk areas uncovered the analysis helped develop an internal audit schedule over the next 3 years to cover the areas of Claims, Security, Nightly Drawings, IT, Accounting and Retail Contracts. * CBIZ Information Security Assessment – the OLC’s IT audit service provider conducted a comprehensive analysis of the agency information security risk profile. This audit is required by law and is in its’ second year of execution. The OLC had 5 less findings from FY21 (down to 17 from 22) and no finding was defined as “critical”. Five of the findings were directed at OMES and the OLC indicated that discussions with OMES were ongoing to discuss potential solutions. Of the 12 “OLC-owned” findings, 5 were already resolved and the remaining 7 would be completed by January 30, 2022. AGENDA ITEM 5: Executive Director report Jay Finks, Executive Director, covered several items... Sales & Profits Review: * Current sales up 16.5% vs prior year * Draw sales up 31% due to higher level jackpots from Powerball & Mega Millions vs prior year * Instant sales up 12% vs prior year * Mr. Finks discussed some of the continuing challenges in the marketplace including extremely high levels of inflation, gas prices and a continued retail work force shortage * OLC anticipates exceeding the FY22 appropriation by over $20 million Legislative Review * Provided information to the Board that the Lottery’s plans on introducing a bill in support of iLottery (the ability to sell Lottery tickets via the internet) were on hold based on leadership feedback but that discussion were ongoing and very positive in support of addressing the Lottery’s need. * Provided more detailed information regarding a new bill that would be introduced in the 2022 session. The measure would guarantee a $60m appropriation on an annual basis to the existing formula and then direct all remaining profit to a more tangible education source such as a Teachers Excellence Program; a program focused on increasing teacher pay. Operations Review: What’s happened in October & November? * Implemented Prize Pay program at the OLC Winners Center * Launched HD test (12 store program) at Walmart Super Center * Completed 3rd party comprehensive IT Audit * Launched first $50 ticket on Nov 23 * Continued corporate expansion of HD and SciQ program in key retailers – On Cue, 7-Eleven and Quik Trip * Conducted and responded to FY21 employee survey What’s on the calendar December - March? * Continued corporate expansion * Dollar General analysis, major changes * Walmart RSS model * Launch of a new website; digital offerings * Backup site move to TX1 Long-Term Outlook * Exploration of 3rd party courier opportunities * Lotto America: adding Monday draws on July 18 * Fast Play launching on Sept 1 AGENDA ITEM 6: Discussion and possible action regarding appointment of board officers, board committee chairs and board committees for 2022 Mr. Finks reviewed the current appointments for FY21 as follows… Chair:  Nevyle Vice Chair:  Jim Secretary:  Christy Treasurer:  Tracy Audit & Finance:  Ted Blodgett (chair); Nevyle; Tracy Nominating:  Tracy (chair); Blodgett; Sims Government Relations:  Jim (chair); Christy; Scott The board members discussed and decided not to make any changes to the current lineup. However, Mr. Cable indicated that 2022 would be his final year on the board and members should be looking for a planned succession plan for later on in the year. Mr. Eisenhauer motioned that the board accept current lineup of board chairs and committee members and Mr. Blodgett seconded the motion. The Chair ordered a roll call with the following results: Roll Call Vote: Yes: Blodgett; Cable; Eisenhauer; Orbison; Rawlings; Sims No: Abstain: The result was 6 votes in the affirmative, none opposed, and none abstained. The motion passed. AGENDA ITEM 7: Discussion and possible action regarding board meeting dates for 2022 Mr. Finks proposed the following dates: March 22 June 21 September 20 December 6 Mrs. Rawlings motioned that the board approved the recommended 2022 meeting dates. Mr. Sims seconded the motion. The Chair ordered a roll call with the following results: Roll Call Vote: Yes: Blodgett; Cable; Eisenhauer; Orbison; Rawlings; Sims No: Abstain: The result was 6 votes in the affirmative, none opposed, and none abstained. The motion passed. AGENDA ITEM 8: New business Mr. Finks stated that there was no new business. Mr. Cable took the opportunity to commend Mr. Finks and his staff for their excellent work and commitment to Oklahoma. AGENDA ITEM 9: Adjournment Mrs. Rawlings moved to adjourn. Mr. Eisenhauer seconded the motion. Roll Call Vote: Yes: Blodgett; Cable; Eisenhauer; Orbison; Rawlings; Sims No: Abstain: The result was 6 votes in the affirmative, none opposed, and none abstained. The motion passed.