Tennessee's lottery is on track to be either the best or second-best lottery startup in U.S. history, lottery President Rebecca Paul said yesterday.
Players have racked up about $422 million in sales as of last Sunday, which could put Tennessee ahead of Georgia's record-setting per capita sales in its first five months and 20 days of operation, Paul said.
The lottery is using June 30, the end of the state's fiscal year, to measure its performance since games began here on Jan. 20. South Carolina has the second most successful launch, she said.
The Tennessee lottery is expected to transfer $120 million next month to the education account of which $88 million is needed to fund the first semester of HOPE college scholarships this fall, Paul said.
Another $1.9 million from unclaimed prizes will go to after-school programs.
At the rate it's going, the lottery is on track to exceed $800 million in sales its first 52 weeks, Paul told lottery board members in a meeting yesterday.
Sales of scratch-off and Powerball ticket sales are going strong, Paul said. The lottery's Cash 3 game is performing ''much less'' per capita compared with similar games in other states, Paul said.
She is planning a new game this fall, similar to other games that involve players selecting their own numbers, but did not provide details.
Despite what lottery board members called a ''great start,'' Paul is not expected to get the top bonus she could have earned for raising money for scholarships.
Nonetheless, she is on track to earn $350,000 in incentive pay, which is on top of her base salary of $350,000.
The maximum bonus she could have gotten was $402,500.
Paul has already earned a $245,000 bonus for getting games started earlier than projected. She is expected to get an additional bonus of $105,000 for raising more than $112 million for the education account. Had she raised at least $128 million, she would have earned a $157,500 bonus.
State Sen. Steve Cohen, D-Memphis, who sponsored the lottery, said he was confident all along the lottery would end up so successful.
Whether there will be enough lottery proceeds for two other education programs after-school care and pre-kindergarten remains unclear.
In his 2004-05 budget, Gov. Phil Bredesen budgeted $8 million for pre-kindergarten and $2 million for after-school care as long as excess money is available after scholarships are paid. ''I think there is excess money now,'' Cohen said.
Bredesen is taking a wait-and-see attitude, his spokeswoman Lydia Lenker said.
He will look into it but does not want to start funding those programs if there won't be money down the road to continue them, she said.
Cohen said his one disappointment is that standards for bonuses were not made strenuous enough during the startup period. ''It's obscene what she's going to receive,'' Cohen said. ''I would hope we would reconsider the whole idea of bonuses at all,'' Cohen said, noting that the South Carolina lottery does not give bonuses except to the sales staff, and that Kentucky stopped its bonuses when the state's finances hit rocky times.
The Tennessee lottery has paid $72,000 in bonuses to its four executive vice presidents and $350,304.53 to all other employees.
''I don't think you have to give bonuses for people to do their jobs,'' Cohen said. ''When someone has a salary in the area of $350,000, keeping your job should be proper and appropriate incentive.''
Board members have stood by the incentive plan.
Estimates of next year's proceeds are very conservative $200 million to go to education, lottery board Chairman Denny Bottorff said. He said that he expects the next round of performance targets, which have not yet been set, to be based on the lottery doing much better than that.
Estimates of lottery proceeds
2004 (Jan. 20, 2004-June 30, 2004)
Gross sales: $426.4 million
Education account: $120.4 million
2005 (July 1, 2004-June 30, 2005)
Gross sales: $693 million
Education account: $200.8 million
Source: Tennessee Education Lottery Corp.
Who's buying lottery tickets?
A breakdown of $420 million in lottery sales from Jan. 20-June 20:
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