Search narrows for state's new lottery director

Sunday, May 8th 2005, 3:13 pm

By: News On 6

OKLAHOMA CITY (AP) _ In about six months, a new state agency will have to be built from the ground up and thousands of retailers across the state will have to be trained and outfitted to sell lottery tickets.

With about $62 million in lottery revenue already included in the proposed budget for the fiscal year that starts July 1, the state has a lot riding on having some form of lottery operational as soon as possible.

Once the lottery is fully operational, state finance officials estimate $150 million will be generated annually to fund common education, higher education and career technology centers.

State officials are hopeful a new director will be in place by June 1 and that the first instant tickets, or scratch-off games, will be sold by the fall.

But whoever is selected will face a great deal of work to get the lottery up and running before the end of the year. Besides hiring a staff and setting up an office, vendors will have to be solicited and trained, machines must be purchased, programmed, connected and placed into stores, and tickets will have to be printed and shipped to retail outlets across the state. All of these things must be done before the first ticket is sold.

``There's probably a thousand jobs that have to be done concurrently,'' said New Mexico Lottery CEO Thomas Shaheen. ``It's fast paced, and it's going to be a fast process. Things are going to have to happen quickly.''

The three-member search committee of the Oklahoma Lottery Commission has narrowed its ``short list'' to three candidates and hopes to have a new director hired by June 1, members said. A special meeting is scheduled for Tuesday, when members of the commission are expected to meet privately to discuss the hiring of an executive director.

Former Oklahoma City Mayor Ron Norick, who heads the three-member search panel, said he remains optimistic scratch-off lottery tickets will be available to Oklahoma consumers ``by late fall or early winter'' if a new director is in place by June 1.

``If we can get somebody hired by then, I think we're optimistic,'' Norick said. ``If we can't, then obviously that becomes a more unrealistic date.''

Norick said commissioners plan to hire a director at an annual salary of between $150,000 and $200,000.

``Every day you don't sell tickets is a day you lose revenue,'' said Rebecca Graham Paul, president and CEO of the Tennessee Lottery.

Graham, who earned more than $700,000 in 2004, previously started up lotteries in Florida and Georgia. After Tennessee hired her in September 2003, lottery tickets went on sale to the public four months later.

Because of the immense amount of work that needs to be done quickly, Paul said she thinks it's important to hire someone with experience operating a lottery from the ground up.

``I'd look for someone who knows where the pitfalls are, knows what decisions need to be made,'' she said. ``I would definitely look for lottery startup experience.''

Tulsa attorney Jim Orbison, another member of the search committee, agrees, but said finding someone with startup experience may be difficult because of the market demand. But he said experience running a state lottery is a must.

``On-the-job training just doesn't fit our situation here,'' Orbison said. ``We've got to be up and running in the fall. We don't have the luxury of bringing someone on and getting them up to speed.''

Orbison and Norick wouldn't identify any of the three finalists, but Orbison confirmed each currently is working for a state lottery.

``I think that's safe to say,'' he said.

Dave Garrett, a member of the Georgia Lottery board of directors, headed the panel in that state when the state lottery was implemented in 1993. Garrett said a critical decision in the early stages will be selecting from one of a handful of vendors who provide a wide range of lottery services to states.

``That's a very contentious process,'' Garrett said. ``There aren't very many (vendors) in the game to start with, and the ones that are play it as a war.''

Garrett said Georgia's first step was to hire Batelle Institute, a Columbus, Ohio-based lottery consulting firm, to help guide the state through the process of selecting vendors and getting the system off the ground.

``Suddenly, you're dealing with all kinds of technological nuances,'' he said. ``You have to surround yourself with people who have the necessary expertise.''

Despite numerous detractors and intense media scrutiny, Garrett said Georgia was able to launch one of the most successful state lotteries in the country. He said that was accomplished by focusing on those who benefit from the lottery revenue _ state high school students who get free scholarships to in-state universities and youngsters who enroll in pre-Kindergarten programs funded through lottery proceeds.

``What saved us were the programs that we were designated to fund,'' Garrett said. ``That was our saving grace at the end of the day.''