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Georgia Lottery bonuses stir lawmakers into action

Georgia LotteryGeorgia Lottery: Georgia Lottery bonuses stir lawmakers into action

The Georgia Lottery board's decision to hand out nearly $3 million in bonuses to employees this year has lawmakers vowing to put new controls on the corporation.

Senate Majority Whip Mitch Seabaugh (R-Sharpsburg) filed legislation Friday that would give lawmakers appointments to the Lottery Corp. board. Currently, the governor appoints the board. His bill, which will be considered during the 2008 session, also would mandate that all Lottery Corp. spending, including employee bonuses, be approved by a committee of legislative leaders. The session begins Jan. 14.

House Higher Education Chairman Bill Hembree (R-Winston) said he plans to file a bill to force the Lottery Corp. to give more ticket sales money to education programs, such as the HOPE scholarship and pre-kindergarten classes.

Lottery Corp. officials said Friday that they had no comment on the proposals.

However, Georgia House Minority Leader DuBose Porter (D-Dublin), who helped sell the original lottery legislation to the House in the early 1990s, said the changes are not needed.

"We need to leave it alone and let it operate as it has successfully for the last 14 years," he said.

Both bills address recent criticisms of the Lottery Corp., which was set up as a private entity with limited legislative oversight.

Since inception of the games in 1993, lottery ticket sales have increased all but one year and the corporation has transferred more than $9.5 billion into state education programs.

However, lawmakers were outraged over the bonuses given this year to Lottery Corp. employees, including $236,500 received by Lottery President Margaret DeFrancisco. Lottery officials say the bonuses are necessary to keep employees focused and motivated, and that other corporations offer similar incentives.

Legislators also have criticized the Lottery Corp. because less than 27 percent of ticket sales goes to education program. State law requires the lottery to return, in "as nearly as practical" 35 percent of sales proceeds to education programs. That percentage has been dropping, but lottery officials say the more they give away in prizes, the more tickets they sell. Because of that, even at 27 percent, the corporation increased the amount of money going to education programs last year because the total pot of sales grew.

Still, Seabaugh said the bonuses and low percentage of sales going to HOPE and pre-kindergarten "are a signal that they (lottery officials) need a little more accountability and oversight.

"It is true that this is a private corporation, but it is a unique private corporation established by the General Assembly for a specific governmental purpose. It is not your typical private corporation," Seabaugh said.

"We have taken actions in the past to protect the HOPE scholarship, and we cannot let some executive and board act without accountability and have them damage all the work we tried to do to protect HOPE."

Hembree said he supports Seabaugh's effort to rein in lottery bonuses.

"We hope people will be hired that make good business decisions," Hembree said. "In this case, there were bad business decisions made by the board and executive director. If these two groups can't make wise choices, the Legislature needs to step in and give some direction."

Hembree's bill would mandate that 35 percent of sales go to HOPE and pre-kindergarten classes, up from less than 27 percent today. That could mean tens of millions of dollars more for the school programs, but only if sales remained at their current levels.

Seabaugh and Hembree shouldn't expect backing from Gov. Sonny Perdue in their efforts. While the governor supports some level of legislative oversight, he backs the current setup that allows him to appoint the board that runs the Lottery Corp. He does not support expanding the power of lawmakers to help run the lottery.

"Governor Perdue hasn't seen this proposed legislation, but he is aware that recent lottery revenue reports are at an all-time high," said Heather Teilhet, the governor's spokeswoman. "The lottery's private enterprise structure is a primary reason for its success."

Atlanta Journal-Constitution

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8 comments. Last comment 9 years ago by Stack47.
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Avatar
Kentucky
United States
Member #32652
February 14, 2006
7310 Posts
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Posted: December 15, 2007, 1:51 am - IP Logged

"State law requires the lottery to return, in "as nearly as practical" 35 percent of sales proceeds to education programs. That percentage has been dropping, but lottery officials say the more they give away in prizes, the more tickets they sell."

Which is higher, 35% of $2 billion or 27% of $3.4 Billion?

"We hope people will be hired that make good business decisions," Hembree said. "In this case, there were bad business decisions made by the board and executive director."

The bonus was only 0.035% of the profits, that won't help much, and I doubt the director, the board or 2500 employees will work for minimum wage and the retailers will sell the tickets for the fun of it. I guess the only "good business decision" is to lower the prize payouts. 

Will next years sales be $3.4 billon if they lower the prize payouts to get the 35% return?

    Avatar

    United States
    Member #6950
    September 15, 2004
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    Posted: December 15, 2007, 8:06 am - IP Logged

    Just a thought "What about sharing some of the bonus with the state employee's, they could use a bonus at the end of a hard working year.  Big Smile

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      United States
      Member #10720
      January 23, 2005
      933 Posts
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      Posted: December 15, 2007, 9:11 am - IP Logged

      Do they want privatization or not (they and other States considering it)? Let the free market decide who gets bonuses and what the payout ratios are, just be open and honest with the players and disclose everything, from where every penny of the money goes, what #s are played most or least often, the prize ratios, and how the drawings are conducted.

        nanolike's avatar - pink2
        WorldWide
        United States
        Member #55215
        September 18, 2007
        76 Posts
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        Posted: December 16, 2007, 4:52 am - IP Logged

        If Employees need more money or an incentive then maybe they could let them play the lottery like the rest of us have to do,  if they dont win then hey no extra money for you this year, hey aint this what the rest of us have to do?

         

        The lottery seems to think this incentive of winning a lottery jackpot is enough for the public. As she collects her big fat check of a  $236,500 Miss Lottery President Margaret DeFrancisco whoever she is. What? It isnt enough incentive for their own employees to live in HOPE of extra money by winning a lottery jackpot but it is for your customer to do so? I wonder why? Something wrong with this incentive program of HOPE!

        Maybe they could use the same marketing strategies on their mployees to keepthem dreaming and wishing big that they use on the rest of us, it seems to keep most of us going on living in HOPE of winning the lottery for years and years. Even 20 years sometimes before a big win! Think of it this way, If Its HOPE that keeps us going maybe it can be HOPE that keep them going too. 

        How about that incentive program Miss President DeFrancisco.

        O not good enough, now you know how the rest of us feel. How about letting the public win more of their own money before you start thinking about yourself. o you got your check alright, you've taken more than your share. How about mking more tickets win. How about decreasing the odds so your customers dont have to go broke just living in HOPE!

        O just looking out for your own are you? Typical.

        It's a NanoLike World!

          Badger's avatar - adu50016 NorthAmericanBadger.jpg
          Wisconsin
          United States
          Member #1303
          March 27, 2003
          1508 Posts
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          Posted: December 16, 2007, 11:40 am - IP Logged

          Stack 47 writes :"Which is higher, 35% of $2 billion or 27% of $3.4 Billion?"

          Exactly.  I've always blanched when people in business talk in percentages.  It doesn't matter what percentage of profit you are making,  for example, if that percentage equates to more dollars than a larger percentage would.  If you offer someone 50% of $100 or 10% of $1,000, anyone that goes for the former doesn't know basic arithmetic.

          ============

          How can you tell if a politician is lying?

          Answer: His lips are moving.

            Avatar
            Kentucky
            United States
            Member #32652
            February 14, 2006
            7310 Posts
            Offline
            Posted: December 16, 2007, 7:49 pm - IP Logged

            If Employees need more money or an incentive then maybe they could let them play the lottery like the rest of us have to do,  if they dont win then hey no extra money for you this year, hey aint this what the rest of us have to do?

             

            The lottery seems to think this incentive of winning a lottery jackpot is enough for the public. As she collects her big fat check of a  $236,500 Miss Lottery President Margaret DeFrancisco whoever she is. What? It isnt enough incentive for their own employees to live in HOPE of extra money by winning a lottery jackpot but it is for your customer to do so? I wonder why? Something wrong with this incentive program of HOPE!

            Maybe they could use the same marketing strategies on their mployees to keepthem dreaming and wishing big that they use on the rest of us, it seems to keep most of us going on living in HOPE of winning the lottery for years and years. Even 20 years sometimes before a big win! Think of it this way, If Its HOPE that keeps us going maybe it can be HOPE that keep them going too. 

            How about that incentive program Miss President DeFrancisco.

            O not good enough, now you know how the rest of us feel. How about letting the public win more of their own money before you start thinking about yourself. o you got your check alright, you've taken more than your share. How about mking more tickets win. How about decreasing the odds so your customers dont have to go broke just living in HOPE!

            O just looking out for your own are you? Typical.

            "If Employees need more money or an incentive then maybe they could let them play the lottery like the rest of us have to do, if they dont win then hey no extra money for you this year "

            The last time I looked the Georgia Lottery Corporation was in the gaming industry and laws prohibit employees from gambling on the games they run. But even if they did "let them play" and call it a win bonus, that money would still be deducted from the profits.

            "As she collects her big fat check of a  $236,500"

            What is the average salary of a CEO of any company that has annual sales of $3.4 billion and retains 27% as profit?

            It's really easy to decide if Margaret DeFrancisco's salary is justified and if her bonus incentive is producing results by looking at the bottom line. The facts show an annual sales growth rate of 16% while maintaining a 27% profit after salaries and bonuses are deducted. If GLC was a publicly traded company and after hearing those results at the annual stockholders meeting, DeFrancisco would probably get a standing ovation and have her salary increased.

            "How about that incentive program Miss President DeFrancisco."

            The facts are simple, she increased profits by 16%, maintaining a 27% profit to sales ratio without decreasing prize payouts. Some state legislators are demanding 35% profit to sales ratio but to get that would mean smaller prize payouts and Hargrove type cost cutting measures without considering what impact that would have on next years sales or future sales.

            "How about letting the public win more of their own money before you start thinking about yourself."

            You must be one of those people that don't want the facts getting in the way of their arguments. How could anybody raise payouts and increase the current 27% profit to sales ratio to the 35% the state legislator are demanding?

              nanolike's avatar - pink2
              WorldWide
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              Member #55215
              September 18, 2007
              76 Posts
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              Posted: December 17, 2007, 7:53 am - IP Logged

              "If Employees need more money or an incentive then maybe they could let them play the lottery like the rest of us have to do, if they dont win then hey no extra money for you this year "

              The last time I looked the Georgia Lottery Corporation was in the gaming industry and laws prohibit employees from gambling on the games they run. But even if they did "let them play" and call it a win bonus, that money would still be deducted from the profits.

              "As she collects her big fat check of a  $236,500"

              What is the average salary of a CEO of any company that has annual sales of $3.4 billion and retains 27% as profit?

              It's really easy to decide if Margaret DeFrancisco's salary is justified and if her bonus incentive is producing results by looking at the bottom line. The facts show an annual sales growth rate of 16% while maintaining a 27% profit after salaries and bonuses are deducted. If GLC was a publicly traded company and after hearing those results at the annual stockholders meeting, DeFrancisco would probably get a standing ovation and have her salary increased.

              "How about that incentive program Miss President DeFrancisco."

              The facts are simple, she increased profits by 16%, maintaining a 27% profit to sales ratio without decreasing prize payouts. Some state legislators are demanding 35% profit to sales ratio but to get that would mean smaller prize payouts and Hargrove type cost cutting measures without considering what impact that would have on next years sales or future sales.

              "How about letting the public win more of their own money before you start thinking about yourself."

              You must be one of those people that don't want the facts getting in the way of their arguments. How could anybody raise payouts and increase the current 27% profit to sales ratio to the 35% the state legislator are demanding?

              Big SmileYour points are valid yet ok the $236,500 received by Lottery President Margaret DeFrancisco was a bonus in addition to her regular annual pay, as far as I read.

              Lottery officials say the bonuses are necessary to keep employees focused and motivated,

              I say they are not necessary and they are only fooling us by making us think they are, they are not necessary!

              What is necessary is for the whole lottery corp t get their head out of the money box they have their head up into and think outside the box they have their head in. All these people seem to do is see the 4 walls of the box their head is up into that reads bonus's bonus's bonus's bonus's and they never take the stupid box off their head long enough to see anything other than whats inside the box they have the head up into!

               Am I making sense. There ARE other alternatives but they rarely want to or can even see them.

              How about instead of bonus's in cash on their check like the president recieved they teach the employees how to invest thier money they currently do have, bonus's can always be minimized or taken away the next year.

              If you teach employees how to invest properly in Real estate and other things then bonus's are not as attractive as,  lets say, owning 10 homes worth $100,000 each thats a million dollars in assets.

              Help them to use the money they currently have. I'm taking about hiring the top wizards of real estate and have him teach them daily how to invest instead of giving the empoyees the money themselves. That will fair them all better than some bonus given in cash on a paycheck that they will simply spend on cloths and stuff that depreciates in value, having them end up with nothing anyhow in the end for lack of knoweledge.

               

              Other corporations should offer similar incentives.

               

              There are alternitives other than bonus's.

              Give a man a fish and he'll eat it and be hungry again, Teach him to fish he can feed himself for life.

              All they are doing with giving bonus's in cash like the President recieved is causing the employees to be enabled by the corp bonus's and living for those bonus's "cash" will do you now good if you dont know what to do with it! they are only causing their employees harm and making them live in "want" down the line somewhere.

              It's important to have investment knoweledge cause you know what they say MONEY alone Its never enough!

              People always want more, if they give them each an extra $1000 trust me in the future that extra $1000 on their check wont be enough. Teach them to make an extra 100,000 a year or more now your talking!

              I should be hired and I will show them how to make money! The right way! Big Smile

              It's a NanoLike World!

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                Kentucky
                United States
                Member #32652
                February 14, 2006
                7310 Posts
                Offline
                Posted: December 18, 2007, 1:29 am - IP Logged

                Big SmileYour points are valid yet ok the $236,500 received by Lottery President Margaret DeFrancisco was a bonus in addition to her regular annual pay, as far as I read.

                Lottery officials say the bonuses are necessary to keep employees focused and motivated,

                I say they are not necessary and they are only fooling us by making us think they are, they are not necessary!

                What is necessary is for the whole lottery corp t get their head out of the money box they have their head up into and think outside the box they have their head in. All these people seem to do is see the 4 walls of the box their head is up into that reads bonus's bonus's bonus's bonus's and they never take the stupid box off their head long enough to see anything other than whats inside the box they have the head up into!

                 Am I making sense. There ARE other alternatives but they rarely want to or can even see them.

                How about instead of bonus's in cash on their check like the president recieved they teach the employees how to invest thier money they currently do have, bonus's can always be minimized or taken away the next year.

                If you teach employees how to invest properly in Real estate and other things then bonus's are not as attractive as,  lets say, owning 10 homes worth $100,000 each thats a million dollars in assets.

                Help them to use the money they currently have. I'm taking about hiring the top wizards of real estate and have him teach them daily how to invest instead of giving the empoyees the money themselves. That will fair them all better than some bonus given in cash on a paycheck that they will simply spend on cloths and stuff that depreciates in value, having them end up with nothing anyhow in the end for lack of knoweledge.

                 

                Other corporations should offer similar incentives.

                 

                There are alternitives other than bonus's.

                Give a man a fish and he'll eat it and be hungry again, Teach him to fish he can feed himself for life.

                All they are doing with giving bonus's in cash like the President recieved is causing the employees to be enabled by the corp bonus's and living for those bonus's "cash" will do you now good if you dont know what to do with it! they are only causing their employees harm and making them live in "want" down the line somewhere.

                It's important to have investment knoweledge cause you know what they say MONEY alone Its never enough!

                People always want more, if they give them each an extra $1000 trust me in the future that extra $1000 on their check wont be enough. Teach them to make an extra 100,000 a year or more now your talking!

                I should be hired and I will show them how to make money! The right way! Big Smile

                "Lottery officials say the bonuses are necessary to keep employees focused and motivated,"

                That is the belief of many companies that offer employees bonuses or profit sharing. Some companies pay their employees less in wages than the industry standard and make up more than the difference in a year end bonus. Sounds good providing the employer made good business decisions but sometimes they don't so there is no bonus.

                Offering bonuses is an excellent way to get employees to focus more on their job and not on yesterday's football games.

                "How about instead of bonus's in cash on their check like the president recieved they teach the employees how to invest thier money they currently do have, bonus's can always be minimized or taken away the next year."

                Why would an employer want their employees to focus on their personal investment strategies while they are working?

                Will the employees be paid to attend these classes, will they be held on company time, and how would that help any employee that has no money to invest?

                "I'm taking about hiring the top wizards of real estate and have him teach them daily how to invest instead of giving the empoyees the money themselves."

                The GLC has about 2500 employees spread throughout the state of Georgia and their business is the lottery not real estate. How is that going to help them focus on doing a better job?

                How much will these "top wizards of real estate" charge for their services?

                "I should be hired and I will show them how to make money! The right way!"

                Show the Georgia Lottery how they can increase their 27% profit to sales ratio to 35% without lowering the prize payouts and they might hire you.