Rebecca Paul, who started Georgia's lottery and has been its only director for 10 years, is jumping ship to run the startup lottery for neighboring Tennessee.
"She has informed the governor," Dan McLagan, a spokesman for Georgia Gov. Sonny Perdue, said. "Mrs. Paul has indicated she is looking for a new challenge. We certainly wish her well."
Earlier Sunday, two sources told The Associated Press Paul was negotiating with Tennessee officials to head their new lottery and that she was expected to take the job.
Paul informed Perdue on Sunday, McLagan said.
Paul was lured from a successful lottery in Florida to start the Georgia program, which began selling tickets in 1993 and has pumped nearly $6 billion into two of the nationally regarded education programs it funds.
About 700,000 college students with a "B" average have gotten tuition, books and fees covered by lottery funds. Half a million 4-year-olds have gone to free preschool, making Georgia the only state with universal free prekindergarten.
But state officials now fear the success of the HOPE scholarship program and the pre-k program will outstrip the lottery's ability to pay for them in a few years. A legislative study committee is meeting this summer to consider the problem.
Competition from border states won't help the bottom line.
Just weeks ago, Paul was in negotiations with Tennessee to form a unique partnership in which Tennessee would piggyback on Georgia's technical contracts while Georgia would get a cut of the savings or extra revenue.
Tennessee dventually rejected the idea.
Lt. Gov. Mark Taylor said word of Paul's decision "is devastating news for Georgia. A heartbreaker." He added, "We've almost had this expectation, with the world's No. 1 lottery person, that she would find a way to keep sales ahead of the demand. And now you just can't rest as easily with this loss."
"I hope it's not true," said House Speaker Terry Coleman, D-Eastman. "She's done a great job for Georgia and is seen throughout the nation as an expert in running successful lotteries."
Paul did not return a call placed to her direct line at her Georgia office. The two sources who spoke to The Associated Press on condition of anonymity said Paul told them she would be in Tennessee over the weekend.
Asked if Perdue was alarmed by Paul's departure, McLagan said, "The Georgia Lottery is very well established and well managed, and the governor is confident that it will continue to be run in an exemplary way, and he's very pleased to have such a strong board in place to usher the Georgia Lottery into its next phase."
Tennessee voters last November voted to remove a constitutional ban on lotteries, giving the state Legislature authority to set up games to fund education. It took legislators five months to send bills to Gov. Phil Bredesen to create the lottery and the scholarships it will pay for.
The Tennessee Education Lottery Corp.'s seven-member board of directors, who were confirmed by the Legislature, run the lottery independently of state government.
Last week, the board rejected an overture from Paul to partner with Georgia's lottery. The partnership, which would have been the first of its kind in the United States, could have brought as much as $249 million in extra net proceeds over seven years by allowing Tennessee to start selling lottery tickets four months earlier than its current March 1 startup date, and by leveraging low Georgia vendor rates.
Profits from the games must first go to scholarships, with any excess directed only to pre-kindergarten programs and K-12 school construction. In its first year, the lottery is expected to bring in at least $200 million after prizes and expenses, with scholarships costing an estimated $175 million.