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Lottery board ups goals

Sep 24, 2003, 4:05 am

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Tennessee Lottery

Profit expectations for Tennessee's new lottery director Rebecca Paul increased Tuesday by roughly $6 million following a vote by the state's lottery board.

The Tennessee Education Lottery Corporation (TELC) board, due to Paul's starting one week earlier than planned, increased the amount of net proceeds the lottery must garner if Paul is to receive the whole of her $400,000 incentive package. A former goal described by Paul as "Herculean" -- of $122 million by June 30, the end of the fiscal year, is now set at $128 million.

Paul's base salary is set at $350,000.

"We just talked, and when I agreed to start a week early [board members] said 'do you mind setting the goals a little higher?' and I said 'no,'" said Paul.

Paul must also reach an earlier startup date of Feb. 10 for the first scratch-off ticket sales. The earlier goal had been Feb. 17. The first online ticket goal is now April 8.

Paul, who was recently recruited by Tennessee away from the successful Georgia Lottery Corporation she started, was dismissed prior to serving her three-week notice by the board there prompting her earlier start here. She had been slated to start Oct. 1.

The TELC board Tuesday formerly appointed Paul as president and CEO.

"I think Georgia looks at Tennessee as a competitor and thought I was going to a competitor; a number of the staff wanted to go with me, and they wanted to keep me away from the staff," said Paul.

Paul says from six to 10 employees would be used from other lotteries in key positions. However, the majority of the lottery's 300 to 350 jobs would come from Tennessee, she said. Additionally, gaming vendors could employ approximately 100 Tennesseans.

Major goals, with Paul now on board, include hiring a human resources executive by the end of the week to begin staffing and an aggressive bidding process for gaming vendors essential in laying infrastructure for ticket sales.

Request for Proposals (RFPs) should be issued Oct 8, said Paul, and gaming vendors would have a deadline of Nov. 5 to submit proposals. If the contracts were awarded by the TELC any later than the day before Thanksgiving, the Feb. 10 deadline for the first ticket sale would be impossible, said Paul.

"The biggest challenge is to just get organized," said TELC board Chairman Denny Bottorff. "The long timeline issues are, as we know, the gaming vendors and the retail contracts. & Hitting this aggressive schedule on the RFPs is a challenge."

The TELC is on schedule in recruiting retailers to sell tickets with more than 3,000 signed up at more than 3,500 locations.

State Rep. Chris Newton (R-Benton), leading House sponsor of the state's lottery legislation, called issuance of the RFP's prior to Thanksgiving "feasible."

Paul says she will outsource a majority of the technological aspects of the lottery while keeping sales, marketing and finance duties in-house.

Ted Welch, a major Republican fund-raiser who will serve as a citizen advisor in searching for much-needed office space for the TELC, was chosen due to his expertise in real estate, said Paul.

"He has no property that will be eligible for what we want to do," said Paul, who is a former Illinois State Republican chair. "It was a recommendation by the board chair. We're not a political organization; it makes no difference what anybody's political affiliation is. It's my understanding he was on the citizen's advisory panel for the last governor on [the Tennessee Tower] building.

Net lottery proceeds are to fund college scholarships, first, with any excess going toward K-12 capital outlay projects, early learning and after-school programs.

Officials hope to award the first college scholarships by the fall of 2004.

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