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Hitting the jackpot: Rebecca Hargrove's winning strategy

Insider BuzzInsider Buzz: Hitting the jackpot: Rebecca Hargrove's winning strategy

Tenn. Lottery CEO says tickets seem recession-proof, help fund college educations

NASHVILLE, Tenn. — You may not have heard of Rebecca Paul Hargrove, but in the lottery world, she's a celebrity.

The brash, hard-charging CEO of the Tennessee lottery has accomplished what nobody else has in the state-run gaming business. She ran the lottery in Illinois where sales topped $1.3 billion. Next, Hargrove moved to Florida, where she set a new record: $95 million in sales the first week.

In Florida, Hargrove's marketing strategy included appearing in ads and handing out checks. But some thought she was too flamboyant and she ultimately was fired.

She wasn't out of work long. Georgia tapped her to start its lottery and ticket sales increased 10 percent every year for the decade she was in charge.

Now the 60-year-old dynamo leads one of the nation's newest and most successful state-run gaming operations -- the Tennessee lottery.

Her critics say she's promoting a "fool's tax," taking advantage of people who are not financially sophisticated, and this at a time when most people don't have a lot of spare money.

Hargrove brushes off the notion that lotteries manipulate those who are low-income or uneducated.

"Well, you use the word 'tax' and I have never known taxes to be voluntary," she said. "If you don't pay your taxes, you are going to go to jail. If you don't buy your lotto ticket, you aren't going to jail."

"There are a handful of people who may buy more lottery tickets than they should and I wish that didn't happen," she said. "There are people who have addictions. I am addicted to Diet Coke. You can be addicted to anything. I'm not sure that makes shopping bad or Diet Cokes bad or lotteries bad."

Winning the Lotto: A Dream Come True

As the economy has crumbled, more and more have turned to the dream of that ultimate windfall.

"Lotteries are huge business," Hargrove said. "Let me put it in perspective for you. Last year, the movie industry ... all the box office receipts across the country were about $9 billion. Music: $20 billion. Salty snacks, pretzels, chips, all that stuff ... about $40 billion. Fifty-five billion dollars of lottery tickets were sold -- $55 billion!"

Her winning strategy is fueled by innovative TV ads and new games. The latest is a $20 scratch ticket called Tennessee Millionaires Club.

"The introduction of this game alone, our sales went up $7 million a week," she said. "We've had three million-dollar winners [in a month]."

Hargrove said one of the women who won the $1 million called her husband but couldn't get the words out that she had won. She could hardly breathe but managed to say, "I hit the... I hit the...," which made him think she had been in a car accident. Finally, she found the right words and told him she had hit the lottery.

Whether it was coincidence or her latest savvy marketing move, a fourth million-dollar winner happened to show up the day "Nightline" visited: Brandy Bowling, an unemployed single mother of two.

She said she felt as though her head was "about to explode."

"I can't wait to get the check in my hand to, you know, believe it's really happening," Bowling said. "My family has always worked hard and struggled, and to have this happen to us is awesome. I think my family deserves this."

Profiting From a Risky Business

Of course, the lottery is a game of chance that some say exploits those who can least afford it. But Hargrove doesn't view it that way.

"I am very proud of what I have accomplished in four states," she said.

And those states have been more than willing to return the favor. As a state employee in Tennessee, she can make up to $750,000 a year, including bonuses. Last year, she says she made about half a million.

That's three times the governor's salary.

"I think there are a lot of things that go into a decision that people make when they hire you," she said. "I haven't applied for a job in years. I've been recruited."

"If you look at what happened in Tennessee in particular, we started three weeks earlier than any other lottery," she said. "The profits we made from those three weeks were $30 million, which would pay what I make for 50 years. I am comfortable that the citizens of Tennessee have benefited from my ability to do a startup quicker."

Despite her sky-high salary, Hargrove is quick to remind everyone she has working class roots.

"I'm a poor little girl from the wrong side of the tracks in Indianapolis who has been very, very successful and very, very fortunate," she said.

Almost as if to prove she hasn't forgotten where she came from, she has the same artery-clogging lunch from Krystal Burgers nearly every day of the week.

And she's a big fan of Diet Coke.

"Oh, I drink a lot. I would guess on a work day ... I probably go through 10 or 12 pretty easily," she said.

She moves at a pace that would exhaust someone half her age. And it's been like that for years.

The Making of a Lottery Mogul

Hargrove has always been competitive, making it as far as fourth runner-up in the 1973 Miss America pageant, where she performed a gymnastics routine as Miss Indiana.

She got her big break when she was broadcasting and producing ads at a tiny TV station in Springfield, Ill., the state capital. That led to her Illinois lottery gig.

But throughout her record-breaking lottery run, Hargrove has had her vocal critics, such as Tom Grey, spokesman for StopPredatoryGambling.org, who says she made her fortune by marketing a nearly impossible dream to people with low incomes.

"Rebecca has been pitching what I consider to be a scam on the American public," he said.

Grey said more tickets are sold in "our barrios, our ghettos" than anywhere else because there are more lottery outlets in those neighborhoods.

But Hargrove would tell her critics: "You can't make the numbers add up when you say only poor people play. ... That just isn't where the vast majority of our numbers come from. Now, are there people who maybe buy a lottery ticket who shouldn't? Absolutely. I wish that didn't occur, but it's not my job or anyone else's job to tell people how to spend their discretionary dollar."

"Say you don't have enough money to go to a movie, you can't go bowling tonight, I don't know if you should get that Diet Coke," she said. "You know people who make less money tend to balance their discretionary income better than people who make a lot of money."

She is adamant that she's never marketed specifically to poor people.

"Never have, never will," she said.

Funding Education: 'I Feel Very Good About It'

Hargrove and her supporters say the lottery is a viable, seemingly recession-proof way to raise money. In Tennessee, lottery funds are earmarked for college scholarships. An estimated 98 percent of in-state students at the University of Tennessee are on so-called "HOPE" lottery scholarships, something Hargrove is proud of.

"I remember giving a speech in a small town and when the speech was over, the service staff came up to me and said ... 'I just want to thank you,'" Hargrove said. "She started crying and said, 'My son was the first one in my family to go to college and if it had not been for the hope scholarship that would have never happened. I feel very, very good about it.'"

Forty-two states and the District of Columbia have lotteries: Some give all the revenue to education; others use the money for their general fund to build roads or to pay for health care.

Lotteries aren't going anywhere anytime soon. And neither is the woman known as the Michael Jordan of the lottery, who doesn't seem to have retirement in her vocabulary.

"You know, I love life. I love what I do. I am who I am," she said. "I mean, you've spent a day with me. ... There isn't a whole lot of pretense. It just is what it is. Is that over the top? I don't know."

"It energizes the people that I work with," she said. "Some people love it; some people hate it. ... But at the core, I am who I am. I'm comfortable with who I am and I think that's a good thing."

http://media.lpimg.com/2009032901.mp4

Thanks to helen for the tip.

ABC News

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30 comments. Last comment 8 years ago by spy153.
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Littleoldlady's avatar - basket
Clarksville
United States
Member #487
July 15, 2002
17638 Posts
Offline
Posted: March 29, 2009, 11:57 am - IP Logged

She is right about 2 things...NO ONE can tell a person how to spend their money and all lottery players are not "poor".  In fact, I would say most of them are not "poor".

If you know your number is going to hit, have patience and then KILL IT!

You never know when you will get another hit.

    JAP69's avatar - alas
    South Carolina
    United States
    Member #6
    November 4, 2001
    8790 Posts
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    Posted: March 29, 2009, 11:57 am - IP Logged

    all the box office receipts across the country were about $9 billion. Music: $20 billion. Salty snacks, pretzels, chips, all that stuff ... about $40 billion. Fifty-five billion dollars of lottery tickets were sold -- $55 billion!"

     

    Tobacco sales which are habitual and rake in billions in tax revenue. They should have mentioned that.

    Consumers know what they want to buy. This is still a free country yet for the most part.

    MAGA

      Todd's avatar - Cylon 2.gif
      Chief Bottle Washer
      New Jersey
      United States
      Member #1
      May 31, 2000
      23274 Posts
      Offline
      Posted: March 29, 2009, 12:01 pm - IP Logged

      I'd definitely recommend clicking that "Watch the Video Report" link.  It includes a lot of very interesting info.

       

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

       

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

        truecritic's avatar - PirateTreasure
        Michigan
        United States
        Member #22395
        September 24, 2005
        1583 Posts
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        Posted: March 29, 2009, 12:23 pm - IP Logged

        I'd definitely recommend clicking that "Watch the Video Report" link.  It includes a lot of very interesting info.

        "And those states have been more than willing to return the favor. As a state employee in Tennessee, she can make up to $750,000 a year, including bonuses. Last year, she says she made about half a million.

        That's three times the governor's salary."

        I don't care how good she is, the job should not be a commision type job, should not include bonuses and should not pay more than the Governor.  I find that disgusting.  I wouldn't want my lottery money going to her and other high paid salaries.

        If she wants to make more than the Governor, she should buy a lottery ticket like everyone else.


          United States
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          February 18, 2008
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          Posted: March 29, 2009, 1:01 pm - IP Logged

          I certainly hope she doesn't break her arm by patting herself on the back.Wink

            ThatScaryChick's avatar - x1MqPuM
            Idaho
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            Member #56506
            November 21, 2007
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            Posted: March 29, 2009, 2:07 pm - IP Logged

            I certainly hope she doesn't break her arm by patting herself on the back.Wink

            Haha. LOL

            "No one remembers the person who almost climbed the mountain, only the person who eventually gets to the top."

              konane's avatar - wallace
              Atlanta, GA
              United States
              Member #1265
              March 13, 2003
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              Posted: March 29, 2009, 2:25 pm - IP Logged

              Nothing like putting herself before the public as potential start up director for the Arkansas Lottery.  Show her enough money and she'll be gone.  ROFL

              Good luck to everyone!

                dopey7719's avatar - Lottery-049.jpg
                Midlands, SC
                United States
                Member #69698
                January 14, 2009
                303 Posts
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                Posted: March 29, 2009, 5:21 pm - IP Logged

                Well, I ain't mad at her!  Good for her!!!  If she's good at what she does then she should get paid for it.  She's not putting guns to people's heads and forcing them to buy tickets.  So what if she brags on herself....men do it all the time!

                  emilyg's avatar - cat anm.gif

                  United States
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                  Posted: March 29, 2009, 7:10 pm - IP Logged

                  Well, I ain't mad at her!  Good for her!!!  If she's good at what she does then she should get paid for it.  She's not putting guns to people's heads and forcing them to buy tickets.  So what if she brags on herself....men do it all the time!

                  I agree.

                  love to nibble those micey feet.

                   

                                               

                    maringoman's avatar - images q=tbn:ANd9GcTbRxpKQmOfcCoUqF2FyqIOAwDo7rg9G-lfJLAALPGWJWwiz19eRw
                    Massachusetts
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                    April 14, 2006
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                    Posted: March 29, 2009, 8:10 pm - IP Logged

                    I fail to understand why some people like to control others. If someone of sane mind chooses to spend his money on the lottery, who are we to try and take the lottery from him?? I'm too intoxicated with freedom :-)

                    I cant seem to open the video on the article :-(

                      Avatar
                      NASHVILLE, TENN
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                      February 20, 2006
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                      Posted: March 29, 2009, 8:39 pm - IP Logged

                      Too bad the article failed to mention how much they raised the  tuition in all Tennessee's colleges and universities shortly after the Hope Scholarships began hitting the campii.  While I am all in favor of the lottory and fully support the scholarship program, I find my anger directed at the Board of Regents for raising the tuition.  Today one must not only qualify for a Hope Scholarship to attend the college of their choice but also apply for education loans.  That is totally wrong.

                        time*treat's avatar - radar

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                        Posted: March 29, 2009, 10:25 pm - IP Logged

                        Too bad the article failed to mention how much they raised the  tuition in all Tennessee's colleges and universities shortly after the Hope Scholarships began hitting the campii.  While I am all in favor of the lottory and fully support the scholarship program, I find my anger directed at the Board of Regents for raising the tuition.  Today one must not only qualify for a Hope Scholarship to attend the college of their choice but also apply for education loans.  That is totally wrong.

                        That's the way it works.

                        If some program or other subsidizes a thing, there is less backlash to raising the price of that thing. After awhile it's even less affordable than before.

                        This has happened with subsidized tuition, food, healthcare, and housing.

                        In neo-conned Amerika, bank robs you.
                        Alcohol, Tobacco, and Firearms should be the name of a convenience store, not a govnoment agency.

                          Halle99's avatar - Lottery-043.jpg
                          United States
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                          Posted: March 30, 2009, 6:48 am - IP Logged

                          Nice story...I watched it on Nightline a couple of days ago.

                           

                          US Flag

                          "Wait eagerly for the Lord, and keep to the way; God wil raise you to possess the land; you will gloat when the wicked are cut off".

                                                                                                        Psalms 37:34

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                            NY
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                            Posted: March 30, 2009, 10:47 am - IP Logged

                            "And those states have been more than willing to return the favor. As a state employee in Tennessee, she can make up to $750,000 a year, including bonuses. Last year, she says she made about half a million.

                            That's three times the governor's salary."

                            I don't care how good she is, the job should not be a commision type job, should not include bonuses and should not pay more than the Governor.  I find that disgusting.  I wouldn't want my lottery money going to her and other high paid salaries.

                            If she wants to make more than the Governor, she should buy a lottery ticket like everyone else.

                            Maybe you should read the article again. Apparently, you don't have to buy lottery tickets, so you can see to it that she won't get a dime of your money. I'm skeptical that the lotteries couldn't get the same performance for less money, but her base income is very modest for a chief executive of a company that  nets a profit of several hundred million per year, and most of it is based on increasing that profit each year. When the governor reduces the state's annual budget, or at least holds it steady, maybe he should get a fat bonus, too, and will deserve more money than she does.