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Connecticut Lottery hires director of Illinois Lottery as new CEO

Connecticut LotteryConnecticut Lottery: Connecticut Lottery hires director of Illinois Lottery as new CEO
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The Connecticut Lottery Corp.'s governing board voted Thursday to hire Gregory Smith, acting director of the Illinois Lottery, as its new CEO — in hopes of stability after nearly two years of turmoil, recriminations and investigations at the quasi-public agency with a $1.2 billion annual budget.

The lottery's top job had been vacant since Sept. 22, 2016, when last CEO, Anne Noble, stepped down amid controversy and entered an unusual and lucrative severance agreement with the agency's board of directors.

Smith, 59, who will start July 20 and be paid $200,000 a year, is the former director of the Vermont Lottery. He ran that lottery from 2012 to 2016 — then left to become acting director for the Illinois lottery agency, which several years earlier had become the first in the country to hand over its day-to-day management to a private firm.

Reached by phone Thursday afternoon in Illinois, Smith said he didn't feel right talking about his new job until he consulted with his current superiors. "I would probably like to delay this conversation until i have another exchange with the Illinois administration," said Smith, an appointee of Republican Illinois Gov. Bruce Rauner.

Before running lotteries, Smith had a varied business career. He worked from 2007 to 2012 for the Vermont Country Store — a catalog retail and e-commerce business — mostly as its as director of operations. From 1995 to 2006, he and his wife owned and ran a country inn in Mendon, Vermont, where from 2006 to 2015 he served as chairman of the town government's Select Board.

From 1993 to 1995 he was a tax analyst/senior accountant in Philadelphia for the international pharmaceutical company SmithKline Beecham Corp. He received his bachelor's degree in 1981 from Purdue University in hotel and restaurant management, and worked from graduation until 1988 for Hyatt Hotels Corp.

For all of the well-publicized issues that Smith will need to grapple with at the lottery, there's one problem he won't have — and that's a Niagara Falls of revenue. The lottery corporation turned over a record $345 million in revenue to the state's general fund in the fiscal year that ended June 30, based on more than $1.2 billion in ticket sales. The old revenue record was $338 million, two years ago.

The newly concluded fiscal year's $785 million in prizes to players, and its $70 million in commissions to retailers, also were records.

Noble, the previous CEO, was making $212,000 in the job, $12,000 more than Smith will be.

Her departure from the top job in September 2016 came during a Department of Consumer Protection investigation of lottery officials' handling of a 2015 fraud scheme, in which employees at lottery retail outlets managed to print out winning tickets for themselves in the 5 Card Cash game. The probe resulted in 15 arrests of employees at retail lottery outlets such as convenience stores.

Since then there's has been a succession of acting leaders, continual controversies — and even a botched Lottery drawing this past New Year's Day that required a do-over drawing weeks later and spawned recriminations, personnel problems and government investigations that still endure now.

Noble stayed on the state payroll until Jan. 31, 2017, when she reached a 10-year employment threshold to qualify for lifetime state retirement benefits, and then she collected $25,000 a month as a consultant until July 31, 2017. Now she has a job in New York State and is eligible for a Connecticut pension.

The lottery has had two interim CEOs since Noble left, the more recent being Chelsea Turner, whose regular job had been as the lottery's chief of strategy and government and operational affairs. Her salary was raised from $165,000 to $190,000 when she moved into the acting role more than a year ago. She was one of the finalists for the top CEO job, but ultimately withdrew from the running.

On Thursday, the lottery decided to make her interim vice president, effective when Smith arrives on July 20. Turner's salary will stay at $190,000 in her new job, lottery board of directors Chairman Donald DeFronzo said. Both Smith's hiring and Turner's promotion were approved unanimously by the lottery board at a special meeting Thursday morning.

Lottery Billed For Cable TV

The first acting lottery CEO, in the months immediately following Noble's decision to step down, was then-lottery board chairman Frank Farricker , an appointee of Gov. Dannel P. Malloy, but that did not end well.

Farricker, an active Greenwich Democrat, assumed the unpaid role of acting CEO while also retaining his chairman's position, which led to problems in the following months: Farricker billed the lottery corporation for expenses including his home cable TV bill, and then, in early 2017, he applied to secure the full-time CEO's position for himself on a paid basis.

Farricker's effort to get the paid job subjected him to pointed questions and criticism during investigative hearings by a legislative committee in May 2017 — and soon afterward Farricker resigned as both chairman and interim CEO. Turner then was elevated to the interim CEO job.

In October 2017, Farricker paid $11,318 — a $5,000 fine and $6,318 in restitution to the state — to settle a complaint by the state Office of State Ethics that he used his position to receive an "improper financial benefit."

Just when things seemed to be calming down at the lottery, New Year's Day 2018 brought a million-dollar-mistake that has haunted the agency ever since.

A five-member team that selected winners in the New Year's Super Draw game mistakenly excluded 100,000 of 214,601 eligible tickets that had been sold to players. The error resulted in a do-over drawing on Jan. 16 and a loss of about $1 million — along with suspensions of employees, and investigations by legislators and government regulators.

The month after that snafu, Turner placed the agency's $139,000-a-year security director, Alfred DuPuis, on a paid leave pending possible disciplinary action after an internal investigation concluded that he "acted with gross neglect ... of his duties" leading up to the flawed Jan. 1 drawing. DuPuis immediately went out on a Family and Medical Leave Act leave, and has not returned to work.

The agency's human resources director, Jane Rooney, also went out on a leave around the same time — even though she has not been targeted for possible discipline — and as of Thursday was still not back in the office, DeFronzo confirmed.

News story photo(Click to display full-size in gallery)

Hartford Courant

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4 comments. Last comment 5 days ago by bedrpost.
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music*'s avatar - box
The Big Valley in California
United States
Member #157856
August 2, 2014
2493 Posts
Online
Posted: July 6, 2018, 10:23 am - IP Logged

I wish Gregory Smith smooth sailing and a successful journey in his new role.

 He started correctly by denying a press interview until after consulting with Governor Bruce Rauner of Illinois. 

God bless Gregory Smith.

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  Muddy water is best cleared by leaving it alone.  Alan Watts and Zen Buddhism

    lejardin's avatar - Lottery-014.jpg

    United States
    Member #118609
    November 4, 2011
    1325 Posts
    Offline
    Posted: July 6, 2018, 10:56 am - IP Logged

    Starting salary of $200K ? But $12K less than prior director.  I may be out-of-touch but isnt that excessive?  Or maybe because of the amount of the lottery budget, I dont know.

      Tucker Black's avatar - Kleber Vieira.jpg
      Burlington, VT
      United States
      Member #173303
      February 25, 2016
      101 Posts
      Offline
      Posted: July 6, 2018, 12:18 pm - IP Logged

      Someone help me out here... (figures from the article in bold)

       

      $1.2 billion wagered (i.e. ticket sales)

      $70 million retailer commissions (5.83%)

      $785 million prizes (65.42% return to player)

      $345 million state profit

       

      1.2 billion is exactly 70 million plus 785 million plus 345 million.

      Where is the money coming from to pay the lottery employees? They don't work for free, and we know the director makes $200k.

      There's also the cost of printing scratch-off tickets, delivering them to stores, etc.

       

      In other words, and correct me if I'm wrong, but I don't think the state of Connecticut is making $345 million off the lottery. It's $345 million minus ??? which is ?????

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        New Member
        LaGrange, IL
        United States
        Member #191154
        July 15, 2018
        1 Posts
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        Posted: July 15, 2018, 10:09 am - IP Logged

        I think your giving the lottery more than credit due. I think the other expenses are paid by your tax dollar. They would skim off their profit to pay a bill that they can take from tax payers. First off consider director of Illinois? Since when does Illinois have a reputation for honest business? The Mega game increased from $1 to $2 and that's suppose to make him/lottery look good? Not to mention that Illinois is always making it harder to win by adding more numbers. And again they get a pat on the back for bringing in more money. But it's not for the people, it's for themselves. And still they say they are short of money. If I'm correct, You only get 1/3 the money won. 2/3 goes to the gov, and they still say they're short.  I don't see money collected from taxing winners in there figures either. They make their own laws to suit themselves. Sorry for rambling. But people aught nag and complain and stop being passive, as we are taught to be in near all school levels. But thats another subject.