A $10 million revolving line of credit offered by JPMorgan Chase Bank was approved Thursday by the Oklahoma Lottery Commission in an effort to secure financing for staff and other operational expenses needed to reach implementation sometime later this year.
JPMorgan Chase was selected after five proposals had been submitted to provide the financing for the Lottery Commission until lottery revenues are generated. Commission Treasurer Thomas Riley said three of the proposals were set aside due to issues involving structure and costs, which left the bids from JPMorgan Chase and Citigroup.
Riley said the bid from Citigroup originally came in at a higher cost than the one from JPMorgan Chase and could actually reach a level much higher than the accepted bid when considering the interest rate. Both bids involved a note, Riley said.
The approval of the JPMorgan bid was the latest of several steps required in moving forward with accepting a lender to assist the Lottery Commission in its first full fiscal year. Riley said the bid was already approved by the Council on Bond Oversight on June 30, which prevented the bid from stalling for another month.
That allowed us to move forward without delay, Riley said.
The target date for scratch-off lottery tickets is set for October while online games are anticipated for November. Riley said he estimates that given the $65 million forecast of lottery revenues for the current fiscal year, the lottery stands to lose $800,000 in gross revenues per day if the target dates aren't reached.
The proposal by JPMorgan Chase includes a provision allowing the pricing to be based on how much is drawn as opposed to the entire line of credit. …