Georgia lawmakers question lottery bonuses

Dec 3, 2007, 8:38 am (19 comments)

Georgia Lottery

Top Georgia Republicans are calling for a review of the bonuses awarded to Georgia Lottery officials.

Georgia Lottery President Margaret DeFrancisco and her employees collected nearly $3 million dollars in bonuses this year, a sum that has mystified Georgia legislators who three years ago tightened requirements for the lottery-funded HOPE scholarship.

House Higher Education Committee Chair Bill Hembree called the figures "insane" and Senate Majority Whip Mitch Seabaugh said he wanted to re-examine the group's structure.

He said, "There is no accountability, so they can do what they want — take the money and run and be happy with it."

Lottery officials say the bonuses are needed to stay competitive and keep employees focused.  They say they have increased the funding each year that goes to prekindergarten and the HOPE scholarship — which pays tuition for college students with at least a "B" average.

Lottery board chairman Tony Campbell says the incentives help motivate people and, "The results have been extraordinary."

Bonuses have long been awarded to lottery officials, but they are now 10 to 15 times greater than they were in 1993, the lottery's first year.

But DeFrancisco said some of the perks have been cut back, and new limits have been placed on how much sick time staffers can convert to vacation and leave. She also said it's not fair to compare the lottery to state agencies, because it raises all the money it spends rather than relying on annual appropriations from the state.

The lottery has proven successful. Since 1993 there has been only one year-to-year dip in sales. Sales topped $3.4 billion in the last fiscal year. Some $853 million was transferred to HOPE and prekindergarten programs.

Yet lawmakers are sensitive about the administrative costs — particularly after stiffening requirements for the HOPE scholarship after projections showed the program's growing costs would outpace the rise in lottery ticket sales.

Said Seabaugh, "I just have to wonder how secure HOPE will be paying out $3 million dollar bonuses every year."

AP

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LOTTOMIKE's avatarLOTTOMIKE

Winkmaybe tennessee was the state they were really talking about

dumars798's avatardumars798

They need to spread the $$$ to us G.A players!!!!

konane's avatarkonane

Lawmakers fail to take into consideration those bonu$e$ were originally negotiated by none other than Paul-Hargrove whose track record toward the last of her tenure failed to merit her huge salary bonus she secured for herself.

Ms. DeFrancisco at a much lower salary than Paul-Hargrove has turned the Georgia Lottery around to a real performer .... players are happily spending money.   

Current Georgia Lottery integrity is reflected in sales performance lead by Ms. DeFrancisco.  Let them keep their merit bonuses .... they've well earned them.

Drivedabizness

I wish the article contained more information...I seem to remember everyone at the lottery, all the way down to the janitor, getting (or being eligible for) some sort of bonus. I don't know what Margaret is making total but she seems to have done a pretty good job down there.

 

$3 million is less than 1/10 of 1 percent of sales...compare with the average US Corporation and its a drop in the bucket. A lot of publicly traded firms go by an estimate that says the management team should be getting 10-20% of the net net as exec comp.

 

Still, $3 million could pay for a bunch of HOPE scholarships and all this kind press never helps a lottery. Maybe they should reset the base salaries and bonus schedule....

 

Paying for college is a great way to show the benefits of having a lottery. However, what usually happens, once a dedicated funding source is created like that, is the colleges start raising tuition and fees. That makes it tougher for the Lottery to "succeed" at its mission.

konane's avatarkonane

Quote: Originally posted by Drivedabizness on Dec 3, 2007

I wish the article contained more information...I seem to remember everyone at the lottery, all the way down to the janitor, getting (or being eligible for) some sort of bonus. I don't know what Margaret is making total but she seems to have done a pretty good job down there.

 

$3 million is less than 1/10 of 1 percent of sales...compare with the average US Corporation and its a drop in the bucket. A lot of publicly traded firms go by an estimate that says the management team should be getting 10-20% of the net net as exec comp.

 

Still, $3 million could pay for a bunch of HOPE scholarships and all this kind press never helps a lottery. Maybe they should reset the base salaries and bonus schedule....

 

Paying for college is a great way to show the benefits of having a lottery. However, what usually happens, once a dedicated funding source is created like that, is the colleges start raising tuition and fees. That makes it tougher for the Lottery to "succeed" at its mission.

If memory serves me Ms. DeFrancisco came in at around $110,000 per year plus bonus, not sure if there has been an increase.

On the other hand Paul-Hargrove was raking in in excess of $600,000 per year salary +++ bonuses and was not the performer in any respect whatsoever that Ms. DeFrancisco has been.  Yeah, Becca set it up but ran it into the ground due to greed and no imagination.

As stated many times Ms. DeFrancisco has given back to players in the form of second chance drawings several times a year, contests, buy one get one free coupons, buy so many tickets get one free which were never ever done under Paul-Hargrove. 

logo's avatarlogo

thanks todd

      i believe there is something wrong with our lottery

johnph77's avatarjohnph77

If the $853M was the only funding provided by the GA lottery there's a whole lot more wrong than $3M in bonuses. With $3.4B in sales, the payout to the educational funds from the lottery would only be about 25% of sales. Given that the Fantasy 5 game has pari-mutuel payouts and the Cash3 and Cash4 games pay out 50% or slightly less, that leaves another $850M used for administrative expenses and contract costs. That seems rather high to me.

Captain Lotto's avatarCaptain Lotto

I don't know anything about Georgia, but not all games have equal payouts.  You'd have to look at what they return to the state overall.  For instance, some Scratchers games have higher prize structures than other types of games.  It's not unlike the casino, where the slots sometimes return 90% as prizes and the house makes it up on table games.  They probably release information on the cost of administration as a percentage of sales. 

JAP69's avatarJAP69

So whats the beef with the lawmakers. Madd because they are not on the end of the receiving stick. Ask the lawmakers how much extra they get above their salary to be on committes and all the other perks.

It,s all right here in a nutshell. And playing the lottery is voluntary on the citizens.

She also said it's not fair to compare the lottery to state agencies, because it raises all the money it spends rather than relying on annual appropriations from the state.

So how do lawmakers fund their fancy budget and programs.

Raise taxes

littlejsing's avatarlittlejsing

I've seen firsthand in other institutions how end-of-the-year bonuses can diminish the overall quality of services.  Here in Tennessee the lottery machines provide substandard performance, even the ballots are now printed on such a low grade of paper quality the machine has greater difficulty reading them.  

You can bet Ms Hargrove and her cronies will share the pie left over from these and other corners cut.  Bonuses should be distributed according to quality of services provided not quantity saved.  The number one priority in our state is suppose to be money to fund Education not to make the rich richer.  Honestly it's disgusting! 

chasingadream's avatarchasingadream

Quote: Originally posted by konane on Dec 3, 2007

Lawmakers fail to take into consideration those bonu$e$ were originally negotiated by none other than Paul-Hargrove whose track record toward the last of her tenure failed to merit her huge salary bonus she secured for herself.

Ms. DeFrancisco at a much lower salary than Paul-Hargrove has turned the Georgia Lottery around to a real performer .... players are happily spending money.   

Current Georgia Lottery integrity is reflected in sales performance lead by Ms. DeFrancisco.  Let them keep their merit bonuses .... they've well earned them.

i agree

murph1226

"He said, "There is no accountability...."  Woah woah...  Someone from the government is talking about no accountability?  Weird....  But really does anyone know how much more money these people would be making if they were CEO, president, or director of a private organization??  I guarantee you it would be WAY more than they are making currently.  They are brining in billions of dollars in profits!  Think of other companies that bring in that much money and how much their CEOs are making.  Talking about accountability....  c'mon.  The state is lucky to have people that enjoy their job so much to stay.   

catspick

I have not trusted the Georgia lottery in a couple years now.  They rip off the cash 3 and cash 4 players. Repeat numbers, always the same old numbers month after month. How many draws has it been since they brought a triple????   I see people in the store spending there last dollars in hope that one of the numbers they've played for months would come out. (I"ve done it myself).  And I know it's not going to happen, and don't want to rain on there parade.   There is a slim chance to win anything on the cash three or four anymore. Last week I saw a guy spend $50 on triples. Now we know where all the money there making is going. I don't think they are honest with there payout information either.

How many more things are they going to come out with that cost $20. The raffle, Millionare scratch off. I'm not saying it's not worth the chance, I'm saying that it may not be affordable for the average working person.  Someone's getting richer!!!!  And I don't think it's the average lottery player.

 

Captain Lotto's avatarCaptain Lotto

Not to defend the Georgia Lottery, but you should know a few things about odds and statistics.  It's impossible to predict Pick 3 numbers because it's a random event, but the odds of triples being drawn is about 1 in 1000.  That means with 2 drawings a day, you'd "expect" triples to come out about once every year and a half. 

And I'm not a fan of the higher and higher price points that Lotteries seem to be going to, but a number of "high roller" players seem to like them.  Most of the time, those games have a higher prize structure, meaning they put more prizes into them.  Don't get me wrong, the Lottery is designed to earn money for the state, so don't go thinking playing is your ticket to wealth.  You should only play for fun. 

catspick

The chances of the same exact number repeating in the exact order as it usually does in Georgia, any combination of the same number three times in a month is also astranomical, I'm sure as probable as a triple. But it happens all the time here. We would be blind not to see the numbers in Georgia (I don't know about other states) and know that it is in the hands of someone who can bring a triple any time they want to. It's time to pay a little back to the players.

Stack47

Quote: Originally posted by catspick on Dec 4, 2007

The chances of the same exact number repeating in the exact order as it usually does in Georgia, any combination of the same number three times in a month is also astranomical, I'm sure as probable as a triple. But it happens all the time here. We would be blind not to see the numbers in Georgia (I don't know about other states) and know that it is in the hands of someone who can bring a triple any time they want to. It's time to pay a little back to the players.

"The chances of the same exact number repeating in the exact order as it usually does in Georgia, any combination of the same number three times in a month is also astranomical,"

In the evening drawing I noticed that 990 followed 099, 144 was drawn twice in 7 draws, and 110 twice in 11 draws; all within 40 drawings. You said "it usually does" and if this happens that often in  the Georgia Pick-3, why not develop a strategy based on that and turn it into an advantage?

"We would be blind not to see the numbers in Georgia (I don't know about other states) and know that it is in the hands of someone who can bring a triple any time they want to."

I know that Georgia uses ball machines for the drawings and if they televise the live drawings, what method would they use to bring a triple that would go unnoticed by thousands of viewers?"It's time to pay a little back to the players."Was there a time when Cash 3 paid more than $500 for a straight win?

Stack47

"Lottery officials say the bonuses are needed to stay competitive and keep employees focused."

That is true in any company with annual sales of $3.4 billion and offers 0.35% in profit sharing.

"Bonuses have long been awarded to lottery officials, but they are now 10 to 15 times greater than they were in 1993, the lottery's first year."

It doesn't say how many employees got bonuses in 1993 but the annual sales were $1.1 billion when they got 10 or 15 times less. According to the Georgia Lottery website, the Georgia Lottery Corporation currently employs approximately 250 people statewide. The lottery returned 25% of their sales as profit in 1993 and in the last fiscal year.

"Said Seabaugh, "There is no accountability, so they can do what they want — take the money and run and be happy with it." and "I just have to wonder how secure HOPE will be paying out $3 million dollar bonuses every year."

Sales for the fiscal year 2005 were $2.922 billion and $802 million was deposited in the state education account. In 2006 sales increased by $500 million and profits to education increased by $50 million. Somebody should explain to Seabaugh that a one year $3,000,000 investment returned $50,000,000. What exactly does he find wrong about an investment that returns 1567%?

"Lottery board chairman Tony Campbell says the incentives help motivate people and, "The results have been extraordinary."

The Georgia voters should really consider replacing Mitch Seabaugh with someone that understands business management and let the experts run the lottery.

konane's avatarkonane

Quote: Originally posted by catspick on Dec 4, 2007

The chances of the same exact number repeating in the exact order as it usually does in Georgia, any combination of the same number three times in a month is also astranomical, I'm sure as probable as a triple. But it happens all the time here. We would be blind not to see the numbers in Georgia (I don't know about other states) and know that it is in the hands of someone who can bring a triple any time they want to. It's time to pay a little back to the players.

Call the Georgia Lottery Player Hotline and ask a representative how many ballsets they now use to perform Cash 3 drawings.  Last time I asked a couple of years ago it was at least 16 if memory serves me.  Not sure how many different sets of machines they currently use.

Also ask and verify whether the same group of ballsets are used for both Cash 3 and Cash 4 drawings and you will find out that yes they are.

Anyone expecting a triple in Cash 3 ...... can have it hit in Cash 4 due to rotating through the same group of ballsets.  Over the years I've watched as ballsets were increased in number which account for repeating numbers you're talking about .... happens due to number affinities which no one controls.

Additionally Georgia performs pre and post drawing tests which are done like dry-runs-which-don't-count drawings.  No telling how many triples are logged in on those records.  I'm also given to understand that if someone goes into the lottery office they can request to see which ballsets and machines were used.  Would imagine pre and post testing results may also be available if you ask.

When trying to pick Georgia Cash 3 or Cash 4 numbers for Georgia it is very helpful to look at both results side by side going back 7-10 days for indicators of what is likely to hit in the next couple of draws.

Stack47

Quote: Originally posted by konane on Dec 5, 2007

Call the Georgia Lottery Player Hotline and ask a representative how many ballsets they now use to perform Cash 3 drawings.  Last time I asked a couple of years ago it was at least 16 if memory serves me.  Not sure how many different sets of machines they currently use.

Also ask and verify whether the same group of ballsets are used for both Cash 3 and Cash 4 drawings and you will find out that yes they are.

Anyone expecting a triple in Cash 3 ...... can have it hit in Cash 4 due to rotating through the same group of ballsets.  Over the years I've watched as ballsets were increased in number which account for repeating numbers you're talking about .... happens due to number affinities which no one controls.

Additionally Georgia performs pre and post drawing tests which are done like dry-runs-which-don't-count drawings.  No telling how many triples are logged in on those records.  I'm also given to understand that if someone goes into the lottery office they can request to see which ballsets and machines were used.  Would imagine pre and post testing results may also be available if you ask.

When trying to pick Georgia Cash 3 or Cash 4 numbers for Georgia it is very helpful to look at both results side by side going back 7-10 days for indicators of what is likely to hit in the next couple of draws.

I can't understand why people expect random drawings to be predictable. 

The lotteries tell us they are having a random drawing. They show us a machine with 3 clear compartments where 3 sets of balls numbered 0-9 are mixing and swirling around by forced air that pretty much proves the drawing is random.

"Call the Georgia Lottery Player Hotline and ask a representative how many ballsets they now use to perform Cash 3 drawings."

At best they'll hear about some of the extraordinary measures taken to insure the drawings are random but they should have already known that. Even if they could spot a small irregularity in one of the ball sets, it's too late to get a bet in. They might tell them which ball set they used but don't know when it will use it again because they use a random drawing to choose the ball sets.  We don't want the lotteries selecting which numbers are drawn because they certainly won't be selecting the number we have a big bet on.

Even random drawings follow probabilities and if 27% of possible numbers have double digits, over time 27% of the drawings will have double digits. This doesn't mean there will be 27 doubles in the next 100 draws. People will look back 100 draws and see that only 21 or 22 doubles were drawn and key on that as a playing strategy. Triples are the same but since there are less of them, it might take more time before the number of draws are almost equal to the probability.

Though the number selection process is random, the drawings are predictable. If you look at all the 10 drawing periods, you might find one or two where all the 1st, 2nd, 3rd digits were drawn out of thousands. But in most of the 10 draw periods, 2 or 3 of the digits will be more frequent and because of cause and effect, 2 or 3 digits might not show at all.

"When trying to pick Georgia Cash 3 or Cash 4 numbers for Georgia it is very helpful to look at both results side by side going back 7-10 days for indicators of what is likely to hit in the next couple of draws."

The lottery employee bonuses are cause and effect too. The bonus gives them an extra reason to create things like a number search feature or frequency chart that helps current players and encourages new players. Why are the legislators and reporters questioning the bonuses when it's a win - win situation?

Paying out a bonus means the profits are higher and more money for education. If the goals aren't reached, they saved on bonus but lost on the profits. Looks like a no brainer to me.

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