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Lottery no game for Tennessee executive

Insider BuzzInsider Buzz: Lottery no game for Tennessee executive
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Standing recently in Neyland Stadium with roaring University of Tennessee football fans, Rebecca Paul Hargrove, the highflying impresario of legalized gambling, proudly waved a symbolic check for a billion dollars. The moment, captured on jumbo screens across the stadium, was among the countless plugs for the fund-raising prowess of Tennessee's lottery, which Hargrove started four years ago.

As lottery executives go, few can claim her knack for seizing the spotlight. No matter the occasion, Hargrove, a former Indiana beauty queen turned Powerball potentate, has proved especially gifted at navigating — some say plowing — her way onto center stage.

Often, there is a Salem Menthol 100 or a Diet Coke in her hand. Always, issued in her trademark husky voice, is a less-than-subtle play for a few of your hard-earned dollars.

"Anytime you buy gas, I want you to spend the change on a lottery ticket," says Hargrove, the president and chief executive of the Tennessee Education Lottery Corp. "That's what I do. I raise the money, and the state spends it."

Cantankerous, kinetic and shrewd, Hargrove, 58, embodies what many consider to be the virtues and vices of the lottery industry, from the rise in prize payouts to the proliferation of games and escalating executive compensation.

Over the last two decades, she has built three of the nation's largest state lotteries from scratch — Florida, Georgia and Tennessee — turning them into multibillion-dollar enterprises that have helped fuel the industry's explosive growth. At each turn, she has used her perch to reshape state-sponsored gambling into a highly sophisticated commercial enterprise.

Her track record, coupled with senior positions on several industry boards and influential committees, has given Hargrove a strong hand in creating the template for the nation's lotteries, influencing everything from the design and marketing of games to the legislation under which lotteries operate.

"Rebecca has pretty much written the big book on lottery startups," says Charles Strutt, executive director of the Multi-State Lottery Association, a nonprofit industry group. "Anyone starting a lottery today, if it's not Rebecca, will certainly be making a trip to talk to Rebecca."

Politicians covet the billions that new-style lotteries generate for their states — $56 billion last year. But there are financial and social costs. Ever-increasing prize payouts and marketing costs take a big bite out of money that could be going into education or other government programs. And the proliferation of faster, more addictive games can entice some people into spending huge proportions of their incomes on lottery tickets.

Tom Grey, spokesman for the National Coalition Against Gambling Expansion, a nonprofit advocacy group, is a critic of lotteries and Hargrove's involvement with them. "This is not a benign product," he says. "This is an addictive product, and she has made it as American as apple pie."

For her part, Hargrove contends that the vast majority of lottery customers play responsibly. She also says the commercialization of state lotteries is necessary to compete for consumers inundated with other products, many of which, like lottery tickets, are generally bought on impulse. That lotteries are government-backed is irrelevant in the marketplace, she adds.

"I believe in a corporate structure where you are free from all political influence," she says, sitting in her spacious office in Nashville, its walls crowded with awards and professional memorabilia. "The more you have the ability to make a decision based on what's right for the corporation, the more you will maximize your profits."

Hiring Hargrove has certainly paid off for Tennessee. Within five months of her arrival, the lottery introduced 29 instant-ticket games and two online games, and awarded $227.5 million in prizes. In those first months of 2004, it surpassed financial projections by more than 40 percent by transferring $123 million to the state's education fund and $2 million into after-school programs.

"There is everybody else and then there is Rebecca," says Marvell Mitchell, a member of the Tennessee Lottery Board, which recruited Hargrove. "She brings home the bacon — more bacon than anyone else — wherever she is."

Hargrove has a marketer's instinct for inventing or picking games that become instant hits, often imitated by other states.

Last year, to expand the Tennessee lottery's reach beyond convenience-store counters, Hargrove introduced "Hot Trax Champions," a fast-paced online game intended for bars and using real video of Nascar drivers. While prize drawings of most other lottery games occur once or twice daily, Hot Trax Champions has drawings every five minutes from 6:05 a.m. to 1:50 a.m., and potential jackpots of up to $25,000.

"Her timing for introducing new products is impeccable," says Thomas Shaheen, executive director of North Carolina's lottery. "Once one of her products hits the streets, it usually does well."

Some people argue, though, that Hargrove's influence has been a mixed blessing for the industry. In her push to transform institutions of public trust into private corporations, opponents of lotteries say, the good will of these state-sponsored agencies has been derailed. Indeed, after starting the Tennessee Education Lottery Corp., Hargrove suggested removing the word "education" from its title, but backed down after strong board resistance.

Critics also take exception to Hargrove's annual compensation, which has totaled $750,000 in some years. Industry analysts say that package is about five times that of most lottery directors. Such hefty compensation pressures other states to raise salaries, which further steers the industry away from its public service mission, lottery opponents say.

Mitchell, however, defends Hargrove's pay package. "When you are looking for someone who is responsible for creating scholarship dollars across the state of Tennessee, that is a serious endeavor," he said.

Cohen's criticism

Tennessee Rep. Steve Cohen (D- Memphis) pushed strongly for a state lottery — and Rebecca Hargrove — as a state senator. He called Hargrove the Michael Jordan of the industry upon her arrival in Tennessee.

These days, though, Cohen says that lotteries virtually run themselves and that Hargrove's impact in Tennessee has been marginal at best. He points to the Georgia lottery, which has thrived even though Hargrove no longer runs it.

Last year, for example, Georgia's lottery sales per capita rose to more than $339, or about 93 cents a day for every resident. Under Hargrove, Tennessee's per capita lottery sales were $163, less than half that of Georgia's.

"She's no Michael Jordan. She's more like Horace Grant," Cohen says, referring to Jordan's less dynamic Chicago Bulls teammate. "The lottery is performing exactly as expected, with or without her. She's just a bigger-than-life personality, an Ethel Merman, P.T. Barnum. She has spent her life on stage, strutting and showing off to an audience. But it's just flair."

"Her salary contradicts the whole purpose of the lottery, which is supposed to be about kids who want to go to school. It's against the spirit of what the lottery is about."

Hargrove declined to comment on the specifics of Cohen's remarks.

"Steve worked for a long time in this state to get the lottery started and feels strongly about it. I hope he is proud of the money we have raised," Hargrove said.

New York Times

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13 comments. Last comment 9 years ago by tntea.
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JAP69's avatar - alas
South Carolina
United States
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November 4, 2001
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Posted: November 23, 2007, 10:32 am - IP Logged

which has totaled $750,000 in some years.

 

If you have the knowledge and experience in a profession be compensated for it.

Why work for a paltry sum when you can get more.

If she was asked to start up another lottery why not ask for a flat fee for startup compensation. Then turn the operation over to someone else after startup.

I would ask at least 10 million.

WHATT

    RJOh's avatar - chipmunk
    mid-Ohio
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    March 24, 2001
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    Posted: November 23, 2007, 11:00 am - IP Logged

    Lotteries are run by states to make money like any gambling business and lottery executives like executives in any business expect to make big salaries. 

    Using lotteries to support education or some charitable cause make it easier for the average Joe who plays to feel he's contributing to a good cause rather than gambling his money away and allows the state to claim a higher cause than those private gambling for profit businesses. 

     * you don't need to buy more tickets, just buy a winning ticket * 
       
                 Evil Looking       

      four4me's avatar - gate1
      MD
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      June 18, 2003
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      Posted: November 23, 2007, 11:41 am - IP Logged

      Rebecca may have a lot of experience being in the drivers seat. But when you let that go to your head and it becomes so swollen that it affects your rational.

      She may think she has been doing a good job when in fact she neglects the peoples point of view and instills her one minded attitude towards the business forging the fundamentals of what makes the lottery a success which are the people playing the games.

        tnlotto1's avatar - logo
        nashville
        United States
        Member #49896
        February 18, 2007
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        Posted: November 23, 2007, 11:51 am - IP Logged

        "She's no Michael Jordan. She's more like Horace Grant," Green laughthat is a great line

          tntea's avatar - Lottery-059.jpg

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          Posted: November 23, 2007, 12:58 pm - IP Logged

          Please some other state hire this woman. We need her out of TN..

               OLD/Vtrac   Lottery Bible         Double Warnings      Thumbs Up TN F34/F44

            tnlotto1's avatar - logo
            nashville
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            Posted: November 23, 2007, 1:51 pm - IP Logged

            Please some other state hire this woman. We need her out of TN..

            $750,000 is a large salary to walk away from compared to what other directors around the country make so another state would have to offer her that or more to leave.

              x1kosmic's avatar - neptune vg2.gif

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              December 7, 2006
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              Posted: November 23, 2007, 4:31 pm - IP Logged

              Yea....

              Miss Hargrove's really been livin' it up lately,

              Thats o.k.,   Things have a way of eventually working out, when Cohen's around.

              We were so happy when he got Tn. the lottery.....

              I guess we;ll see how it goes, .....Disapprove

                KyMystikal's avatar - 1457224010054
                Florence, Alabama
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                November 13, 2004
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                Posted: November 23, 2007, 9:11 pm - IP Logged

                $750,000 is a lot of money. I think TN could have hired a book keeper/accountant and a few lottery players from some other states for 6 times less than what Rebecca makes, and still created the same output she has. The lottery was brought into TN with the intent to make money for education. I think there should be some sort of special program set up for those bonuses to which the money goes into a fund to help counties with education budget problems. I think the education lottery should help all not just college students and preschool kids.

                I love doubles and remember, it's just a game!!!!!!

                  Tnplayer805's avatar - G 14_v78828750_Small.JPG
                  North Dakota
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                  Posted: November 24, 2007, 3:08 am - IP Logged
                  $750,000???  If she is so concerned about education, why don't she donate some of that bonus to help?  Interesting question isn't it?  I guess the diet cokes and Salem menthols are more important.  BTW, on the lottery website they put a stupid video of how the drawings are conducted.  BS

                  How are you going to win if you don't play?

                    Todd's avatar - Cylon 2.gif
                    Chief Bottle Washer
                    New Jersey
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                    May 31, 2000
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                    Posted: November 24, 2007, 10:30 am - IP Logged

                    I posted an important blog entry on this topic.  Please check it out:

                    http://blogs.lotterypost.com/todd/2007/11/the-tennessee-lottery-strikes-out-again.htm

                     

                    Check the State Lottery Report Card
                    What grade did your lottery earn?

                     

                    Sign the Petition for True Lottery Drawings
                    Help eliminate computerized drawings!

                      tntea's avatar - Lottery-059.jpg

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                      Posted: November 24, 2007, 10:59 am - IP Logged

                      $750,000 is a lot of money. I think TN could have hired a book keeper/accountant and a few lottery players from some other states for 6 times less than what Rebecca makes, and still created the same output she has. The lottery was brought into TN with the intent to make money for education. I think there should be some sort of special program set up for those bonuses to which the money goes into a fund to help counties with education budget problems. I think the education lottery should help all not just college students and preschool kids.

                      Preschool is the biggest need right now in education.  You would be surprised at the children who start kindergarten who have never picked up a book, ever read to, doesn't know their full name, nor their parents name.  There are children who do not know their colors... or even what a color is.  There are children who cannot even point to the sky when asked. 

                      Due to parents not taking any precious time with them as toddlers for whatever reason.

                      Reading begins in kindergarten now instead of first grade like years ago.   Reading wasn't taught until 2nd grade back when I first started.

                      The less time parents spend with the toddlers the more prep time is needed in school before hitting kindergarten.  OR those children will be left behind.  Not due to the educators, but due the parents who do not take up quality time with their children.

                      There are preschoolers who cannot not...

                      blow their nose

                      eat with a fork

                      drink without a training cup

                      turn the pages of a book

                      know the difference between up and down, in and out, over and under etc.

                      colors, shapes

                      any nursery rhymes

                      some not completely potty trained.

                      Some with speech problems

                      These children have already been left behind.  My opinion, parents should be fined for not taking up time with their children.

                           OLD/Vtrac   Lottery Bible         Double Warnings      Thumbs Up TN F34/F44

                        KyMystikal's avatar - 1457224010054
                        Florence, Alabama
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                        Posted: November 25, 2007, 12:47 am - IP Logged

                        Preschool is the biggest need right now in education.  You would be surprised at the children who start kindergarten who have never picked up a book, ever read to, doesn't know their full name, nor their parents name.  There are children who do not know their colors... or even what a color is.  There are children who cannot even point to the sky when asked. 

                        Due to parents not taking any precious time with them as toddlers for whatever reason.

                        Reading begins in kindergarten now instead of first grade like years ago.   Reading wasn't taught until 2nd grade back when I first started.

                        The less time parents spend with the toddlers the more prep time is needed in school before hitting kindergarten.  OR those children will be left behind.  Not due to the educators, but due the parents who do not take up quality time with their children.

                        There are preschoolers who cannot not...

                        blow their nose

                        eat with a fork

                        drink without a training cup

                        turn the pages of a book

                        know the difference between up and down, in and out, over and under etc.

                        colors, shapes

                        any nursery rhymes

                        some not completely potty trained.

                        Some with speech problems

                        These children have already been left behind.  My opinion, parents should be fined for not taking up time with their children.

                        I totally agree with you tntea, but I'm thinking about helping the kids who are aready past kindergarten  and are already behind. TN needs better teachers. It really got to me a few months ago when we had this girl start working at my job as a temp. She was 18 yrs old and had just graduated high school last year and she couldn't add or subtract.  I had heard of people like this on tv and in the news but never seen anyone like it. She was from Michigan and always bragged about her graduating class and how small it was. I felt sorry for her because I felt her school system just shuffled her through the system. Now she's out on her own trying to make it and finding it is hard without a proper education. She was trying to get hired on as a regular employee where I work but it is a factory and like so many factories around here, a TABE test is required to be hired and you have to have atleast a 10th grade education level to get hired. She took her TABE test to get hired. I asked her what she got and she told me 6.3.  When she told me that I just busted out laughing because I thought she was joking. She looked like she was going to cry so I regrouped and asked her if she told anyone else and she told me yes. She said she told one other person and he did exactly the same thing I did. When she told me that I knew she wasn't playing. I told her she needed to go to the community college because they had classes to prepare her for the TABE test. I also told her to never tell anyone else what her score was. I really felt bad for her because I have a 7 year old 2nd grader who may be is smarter then her. Sometimes when I look at that coworker I think, what were her parents doing. I know I read to my daughter played games with her and the only channel she ever watched until she got to 1st grade was PBS. I wouldn't let her watch Nickelodeon, Disney Channel, or Cartoon Network because I felt they weren't educational and because of commercials. 

                        I love doubles and remember, it's just a game!!!!!!

                          tntea's avatar - Lottery-059.jpg

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                          Posted: November 25, 2007, 6:59 am - IP Logged

                          I just received an 8th grader whose first experience of school was when she put her foot in my classroom this year.  9 years of no formal schooling.  She had been homeschool...  she new the word "was"... and what a quarter is..

                          Now she misses every third day..

                          This 18 year old.... has anyone checked the school record to see how many days this girl attended school each year. 

                           

                          I do not have but 2 of 19 students who is at school 5 out of 5 days a week.   When the students miss that much, it is hard for teachers to catch them up.  Basically the only way to do so is for the teacher and student to stay over in afternoon or come early.  Hell for the kids I  talking about they will not get there at regular time much less come early or stay late.

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