OKLAHOMA CITY (AP) -- A bond oversight council has approved a $10 million line of credit the Oklahoma Lottery Commission needs to start the state's lottery.
The Council of Bond Oversight on Thursday approved the commission's request to seek the funds, which will be used to pay startup and operating costs. Under state laws setting up the lottery, the commission has five years to pay back the money, but commission members hope to have it repaid within two years. The bonds will be repaid from lottery proceeds.
Two financial institutions are negotiating with the commission to handle the bonds, and the commission could choose one at its meeting Tuesday, Commissioner Thomas F. Riley said. If no problems develop, the loan should be available by Aug. 7, Riley said.
As soon as the commission awards a proposal, the state attorney general's office will hold a 30-day protest period for any comments from those concerned with the financial arrangement. After the 30 days, the commission cannot be sued over the loan.
Of a $500,000 loan from the Legislature, the commission still has about $400,000, which is enough to continue efforts to set up the lottery, said James Scroggins, executive director of the lottery. Scroggins said instant lottery tickets should be available on schedule in October and the commission hopes online lottery sales will start ahead of schedule in November.
Tim Martin, a senior bond analyst with the state bond adviser's office, said there are risks related to issuing $10 million of obligations by a new state entity that has not yet generated any proceeds and does not expect to do so for several months.
However, Martin said the risk is reduced by the presence of a highly qualified executive lottery director and core management team and an active, knowledgeable commission.