Georgia Lottery posts record year. Perhaps, that explains those bonuses.
Despite an ailing economy, Georgians keep buying lottery tickets, which is great for HOPE and pre-k, but not so good for family budgets.
Several of you keep asking why we are paying bonuses to Georgia Lottery officials at the same time we are seeing the demand for HOPE Scholarships and pre-k soar, causing legislators to consider cuts to the popular programs subsidized through the lottery.
Here is why:
From today’s AJC:
The Georgia Lottery took in more than $3.6 billion in the fiscal year that ended June 30, generating an increased profit for a record 12th straight year.
The lottery transferred $883,878,000 in profit to the state for education, more than $11.7 million more than last fiscal year. The addition of Powerball, the Atlanta Falcons-themed instant game and other games contributed to the lottery’s continued growth.
Lottery officials said Georgia is the only traditional U.S. lottery to show 12 straight years of growth in profits.
Overall, the Georgia Lottery has returned more than $11.9 billion to the state for education.
I will let the psychologists out there explain how lottery sales increased at a time when more Georgia families slid into poverty.
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47 comments Add your comment
the new math
July 14th, 2010
1:36 pm
Aren’t we then making the assumption that it was strictly the competence of the lottery people who cause the record gains, and not other more likely factors, like people driven desperate by the economy?
Does anybody really think if we cut their pay 50% that the lottery would suffer a serious fall off?
bloodbike
July 14th, 2010
2:02 pm
Just because things are going bad for you doesn’t mean everyone else should be punished. This isn’t directed towards anyone in particular just those who feel that just because they are goin gthrough pain that everyon eelse shoul das well. The people who work at the GA Lottery are doing a bang up job and should see bonus money when they continue to do a great job. Stop hating people!
CADMAN
July 14th, 2010
2:53 pm
Well arent i supprised. I spend $100 on scratch-offs and win nothing.
Duh. Not anymore my friend
Mike Vigilant
July 14th, 2010
3:30 pm
I do think “the new math” is onto something with the desperation idea. It’s not hard for me to see someone who was just laid off spending $1 on a lottery ticket and hoping for the best.
I am glad to see the increased profit being turned over for education. It does come off as a little tone-deaf to give people raises at the same time as cutting scholarships. The article doesn’t mention how many and how much the raises were, and that’s something I’d be interested in knowing.
Not surprised
July 14th, 2010
3:38 pm
Off the specific topic, but – Has anyone noticed how the AJC came out with an article badmouthing the APS pabst blue ribbon committee and almost immediately APS comes out with this b.s. about helping the students? Do they really think that kind of crap is going to keep anyone’s attention away from the fact that they still have not reported anything, still have aps friends and family serving on an independent committee?
Elle
July 14th, 2010
3:41 pm
Economic hardships get some people to justify spending a few dollars each week gambling even as they cut back on other unnecessary stuff.
Also, I believe marketing of the scratch-offs lead to increased sales of lottery tickets. Those scratch-offs are more addictive than other lottery games because they’re inexpensive and purchased almost anywhere. People are playing because they hope to win so they can have something in their pockets really quickly.
Im jealous
July 14th, 2010
3:45 pm
I want a job at the lottery; I heard they pay out huge bonuses to the employee’s.
Doug
July 14th, 2010
3:45 pm
“The Georgia Lottery took in more than $3.6 billion in the fiscal year that ended June 30, generating an increased profit for a record 12th straight year.
The lottery transferred $883,878,000 in profit to the state for education, more than $11.7 million more than last fiscal year.”
The population of Georgia is, give or take, 10 million, approximately 40% of whom are college-age or younger.
In other words, the lottery is generating over $200,000 per college-age or younger person per year.
Where is that money going? Why are there still property taxes? Why are colleges still charging tuition?
I’d call it a criminal conspiracy, but it operates in plain and legal sight.
Elle
July 14th, 2010
3:48 pm
Economic hardships get some people to justify spending a few dollars each week gambling even as they cut back on other unnecessary stuff.
Also, marketing of the scratch-offs have lead to increased sales of lottery tickets. Those scratch-offs are more addictive than other lottery games because they are inexpensive and purchased almost anywhere. People are playing scratch-offs because they hope to win so they can have something in their pockets really quickly.
dawgfan
July 14th, 2010
3:53 pm
Doug, can you tell me how you came about the $200,000 per child college-age and younger?
JB
July 14th, 2010
3:54 pm
And with this kind of revenue (minus bonuses of course), you would think the Hope Scholarship wouldn’t be in such dire straits…….
Doug
July 14th, 2010
3:55 pm
800M / 4M, if my math is right. (Or is it $20K? Yikes, but the point still holds?)
dawgfan
July 14th, 2010
3:57 pm
@ Doug, last time I checked $883,878,000 divided by 4 million kids (40% of the 10 million you state living in Georgia) is approximately $221. I think you carried the decimal point a bit too far.
Doug
July 14th, 2010
3:59 pm
D’OH! I could use sum skooling.
catlady
July 14th, 2010
3:59 pm
Let’s see. The job of lottery officials is to increase profits. The profits increased, so some of them (as I recall) increase their salaries by over $100,000 each year.
My job is a teacher. I successfully teach the students assigned to me. Therefore, can I expect my salary to increase by over $100,000? Even in a year of “economic pressure?”
And, are they remanding to education the percentage agreed-upon when the lottery was established? In every year past, the answer has been NO. Yet our legislators want to say, “Oh,but look how much we have gotten,” ignoring that it is their job to see that education gets the FULL amount set when the lottery was founded.
And for those who claim the lottery workers are not state employees–without the state’s establishment/charter of the lottery as a monopoly, and therefore a government entity, the lottery would not exist.
We have plenty of high level unemployed people who would be glad to work at the lottery for the measly $200000, $300000, $400000 in regular pay.
Ros Dalton
July 14th, 2010
4:04 pm
Well one has to consider that for those 12 straight years those lottery ticket buyers have been educated by the STATE OF GEORGIA. Perhaps that’s why they haven’t yet learned the concept of a tax on the stupid.
Sorry, that joke was too good to pass up, but I don’t really hold the state of our education or the lottery ticket fiends in quite that much contempt. Not quite.
IMHO if you fired every single human being working at the lottery commission but not actively engaged in the physical work of printing the tickets you would post about the same numbers by recovering their salaries. Lottery tickets sell themselves in this state. I can’t be the only one who finds that a little depressing.
dawgfan
July 14th, 2010
4:04 pm
@ Doug…you got that right. I think the real question needs to be what is eating into their profit margin. They are looking at a margin of 24.6%. That’s a lot of overhead!
catlady
July 14th, 2010
4:04 pm
stuck about 3:55
JMo
July 14th, 2010
4:05 pm
I think 800M divided by 4M is 200 dollars per person, according to Google calculator.
GACitizenWatch
July 14th, 2010
4:23 pm
Students Earning Georgia’s HOPE Scholarships and Grants for 2009-2010: 245,753
Estimate: $883,878,000 / 250,000 students = $3535.51
My question is why is the awarded Hope money off in the chart? Where is the rest of that money going?
https://www.gsfc.org/gsfcnew/SandG_facts.CFM
dawgfan
July 14th, 2010
4:26 pm
@GACitizenWatch…some of the money also goes to the pre-K programs.
David S
July 14th, 2010
4:26 pm
And yet with all the money, the quality of education continues to decline. Big surprise, since money spent has not correllation to outcomes received.
Maureen Downey
July 14th, 2010
4:26 pm
@the new math, Except that not every state lottery has seen that increase so either Georgians are different in their penchant for gambling or the lottery officials here give them more reason and motivation to gamble — which is what we hired them to do.
Maureen
Maureen Downey
July 14th, 2010
4:28 pm
@David S, I would argue that the quality of Georgia’s public universities and colleges has increased. And I think that you could look at several factors to support that, including average SAT scores — just posted on that the other day — and graduate school admissions.
Maureen
ItsJustCrazy
July 14th, 2010
4:29 pm
The lottery is a commodity that, for the most part, sells itself. The vendors running the lottery here in Georgia, Scientific Games and Gtech, are largely responsible for increasing profits and sales. Their contracts are written so that they make more money when the lottery makes more money. The actual Georgia Lottery employees have very little to do with increasing sales – they are mostly there for administrative purposes. It’s a joke that they are paid bonuses for what little they do to earn them.
Freedom Education
July 14th, 2010
4:44 pm
I wonder how big my bonus will be since my students and school made AYP eight years in a row. I sure hope my bonus is bigger than last year. Oh, I think I received no bonuses ever, along with furlough days and frozen pay.
Maureen Downey
July 14th, 2010
4:48 pm
@Freedom, Under many merit pay systems, you would get a bonus for your AYP performance. It would not be Georgia Lottery corp. bonus size, but it would be a bonus.
Maureen
Ernest
July 14th, 2010
5:22 pm
We’ve discussed this before. Lottery employees are NOT state workers. If their employment contract provides bonuses based on hitting certain targets over the course of the year, they are entitled to them. Income envy will not get us anywhere……
ScienceTeacher671
July 14th, 2010
6:00 pm
Like catlady, I’d like to know if the lottery is remanding its maximum percentage yet. Shouldn’t it be?
catlady
July 14th, 2010
6:54 pm
If I work for the only business like it, and the state regulates who can do it and is the sole grantor of that ability, I DO work for the state!
Just like, if I provide the only regulation of restaurants in Georgia (they cannot serve people without my okay), then I provide a state function and I AM a state employee.
I don’t really care, however, AFTER the Lottery Corp repays all the money it was SUPPOSED to give to education since its inception. It will be a GREAT DEAL of money, if you estimate 5-7% per year (plus interest).
The lottery was approved based on it paying the certain percentage. If the Lottery Corp cannot do that, it should be awarded to another company.
Just Saying...
July 15th, 2010
6:54 am
GA Constitution
SECTION II.
ORIGIN AND STRUCTURE OF GOVERNMENT
Paragraph VIII.
(c ) The General Assembly may by law provide for the operation and regulation of a
lottery or lotteries by or on behalf of the state and for any matters relating to the purposes or
provisions of this subparagraph. Proceeds derived from the lottery or lotteries operated by
or on behalf of the state shall be used to pay the operating expenses of the lottery or lotteries,
including all prizes, without any appropriation required by law , and for educational programs
and purposes as hereinafter provided . Lottery proceeds shall not be subject to Article VII,
Section III, Paragraph II; Article III, Section IX , Paragraph VI(a); or Article III, Section IX ,
Paragraph IV (c), except that the net proceeds after payment of such operating expenses shall
be subject to Article VII, Section III, Paragraph II. Net proceeds after payment of such
operating expenses shall be separately accounted for and shall be specifically identified by
the Governor in his annual budget presented to the General Assembly as a separate budget
category entitled “Lottery Proceeds” and the Governor shall make specific recommendations
as to educational programs and educational purposes to which said net proceeds shall be
appropriated. In the General Appropriations Act adopted by the General Assembly, the
General Assembly shall appropriate all net proceeds of the lottery or lotteries by such
separate budget category to educational programs and educational purposes. Such net
proceeds shall be used to support improvements and enhancements for educational programs
and purposes and such net proceeds shall be used to supplement, not supplant, non-lottery
educational resources for educational programs and purposes. The educational programs and
educational purposes for which proceeds may be so appropriated shall include only the
following:
(1) Tuition grants, scholarships, or loans to citizens of this state to enable such
citizens to attend colleges and universities located within this state , regardless of
whether such colleges or universities are operated by the board of regents, or to attend
institutions operated under the authority of the Department of Technical and Adult
Education;
(2) Voluntary pre-kindergarten;
(3) One or more educational shortfall reserves in a total amount of not less
than 10 percent of the net proceeds of the lottery for the preceding fiscal year;
(4) Costs of providing to teachers at accredited public institutions who teach
levels K -12, personnel at public postsecondary technical institutes under the authority
of the Department of Technical and Adult Education, and professors and instructors
within the University System of Georgia the necessary training in the use and
application of computers and advanced electronic instructional technology to
implement interactive learning environments in the classroom and to access the
state -wide distance learning network; and
(5) Capital outlay projects for educational facilities;
Just Saying...
July 15th, 2010
7:02 am
If the constitution has to be changed in order to make you a legitimate business, then you are a government entity because your existence depends on the approval of the state.
Ernest
July 15th, 2010
11:03 am
The obvious thing is all of the is that lottery proceeds are not tax dollars. It is discretionary dollars provided by those that play the lottery. I’m not sure if their compensation comes out of the proceeds but you still must go back to the employment contract.
I know several folks in sales that are hitting their quota while their company is floundering. If their company tried to adjust the payouts after the compensation plan was changed, you’d probably see lawsuits right away.
Chris Murphy, Atlanta, GA
July 15th, 2010
11:40 am
@the new math: +++++1. They get these bonuses, because they can.
Chris Murphy, Atlanta, GA
July 15th, 2010
11:41 am
I could have sworn that when the lottery was being ’sold’ to the public that *half* the money was to go to schools; anyone know?
say what?
July 15th, 2010
12:07 pm
The salaries of the worker bees at the GLC are dismal. Management and executives are another story. They are not state workers because they do not have the same holidays as state employees, the vacation and sick leave system is different, and they are not eligible for ANY of the retirement programs offered to state workers. With 10 years of HR experience, the starting salary in HR is less than $35k. With sales, marketing, or IT experience you begin with a salary that is so low that you want to work hard to get bonuses so that your annual salary is brought up to “average” salary in your field.
Don’t hate on the front line employees because politicians made the system a boondoggle for higher ups in the corporation.
Larry Major
July 15th, 2010
3:21 pm
Georgia law does state amounts for prize money (45 per cent) and net proceeds (maxed out at 35 per cent) to be paid from gross lottery income. However, both are coded “as nearly as practical” and are not legal requirements.
The Lottery Commission is currently running about 55 per cent prize money and 24 per cent profit (the amount that goes to education). The reason for shifting money from profit to payout is the widely held notion that a higher payout will increase sales more than enough to offset the lower profit percentage. This will result in a larger net profit, measured in dollars, than could otherwise be achieved.
The reason complaints about this strategy fall on deaf ears is because, by all indicators, it works. You can see this effect in the games that comprise the New York lottery.
New York’s flagship game, Lotto, has a payout of 40 per cent. Lotto sales dropped a whopping 15 per cent last year. Although New York largely captured the lost income on other games, the result was a decrease in net profit. The money was clearly being spent on games with a higher payout.
By contrast, the Georgia lottery’s gross sales dropped less one half of one per cent last year and the profit increased for the twelfth consecutive year. This attests to not only the success of the strategy, but also superior marketing skills.
As to whether cutting Lottery Commission salaries or bonuses would result in the loss of folks who know how to make this happen, YES it will. We lost Rebecca Paul to Tennessee in 2003 and managed to replace her with someone who is quite competent. There’s really no need to press our luck in this end of the lottery.
catlady
July 15th, 2010
4:03 pm
Chris, they are supposed to be putting 35% off the top into education. So far, I don’t think they’ve made it a single year,usually down by 5% or so (I think). Never short on bonus money, however. Five percent of a lot is a lot.
ScienceTeacher671
July 15th, 2010
4:33 pm
Maureen, what is the latest percentage the GLC is paying to education?
catlady
July 15th, 2010
5:20 pm
If the percentage is “wrong” then we need to change the enabling legislation. Otherwise we are winking at legislatively-sanctioned theft from the children of Georgia.
And we should still be remitted the percentage (plus interest) not remitted previously.
As to payoff, just make fewer of the tickets winners. Keep the big prizes if you must. Change the odds.
I am willing to bet we would NOT see a significant dropoff. Things are too bad in Georgia to keep people from wasting their money on false hopes. (LOL)
We should hold the legislators accountable for not holding the state-chartered lottery accountable, their favorite word for teachers.
Willard Cowan
July 16th, 2010
8:24 am
This person, Larry Major must be a sick person to even try to strategize on the profits, it is simple math, the economy suffers, lottery sales go up especially in the Atlanta/Georgia region. The lottery commission is doing the same thing as the banks/investment companies did in the mortgage industry, paid out for work that was not done or was based on other factors, not their strategy or marketing, but simply the human way of thinking or dealing with a bad situation. IF you don’t have a job and you get an extra penny or two why not try and parlay it into a million dollars.
ScienceTeacher671
July 16th, 2010
9:02 am
For the last couple of days, the news has been reporting that ticket sales are down right now. For what it’s worth.
catlady
July 16th, 2010
2:10 pm
“Georgia Lottery Corporation proceeds are used to supplement, not supplant, traditional educational funding. ” From the lottery website.
Yet, it has done exactly that. By supplanting the SSIG (a grant partly paid by the federal government with a match from state government, which went to poor students regardless of their GPA), the lottery has violated a second principal of its founding.
Emory Texan class of '09
July 16th, 2010
2:48 pm
I dont know how this increase was held up as a positive. HOPE is an incredibly regressive tax with the poor largely funding middle class education. Because of the economy, more people in desperate times (read: the poor) bought tickets hoping it would be a ticket out of their problems. Sure enough, the odds were stacked against them (as always) and HOPE made more money. So lets think about what this has done: Its basically been a HIGHER tax on the poor when they need more EVEN MORE help than they were getting before.
Not only that, but a lot of the reason they are in that situation is because the public education system failed them in the first place, forcing them into undesirable, low paying jobs that were the first cut at the start of the recession. Factor in that most of the money is used to pay for college – something disproportionately available to the middle and upper class- and you are raising the tax rate of the uneducated and unfortunate to pay for the education of the educated and lucky. The biggest irony of all of this is that HOPE was pushed through largely by Democrats and their voter base are the ones hurt most.
Until HOPE only funds early-years public education (where ALL Georgians can take advantage of the educational opportunities), it is a horribly unfair program designed to exploit the easily exploited
Emory Texan class of '09
July 16th, 2010
2:51 pm
and I only say that it was pushed through by Democrats because I have heard Mr. Porter repeatedly claim that he was the force behind its implementation.
Ole Guy
July 18th, 2010
2:08 pm
With such glowing numbers reflecting the disposable incomes of Georgians, one has to wonder about the professed hardships of the masses. The very population which seems all-too willing to step up to the wailing wall of fiscal self-pity has, nonetheless, been able to feed the lottery machine to the tune of 12 straight years of growth…nearly +1.5% in the last year alone.
My presumptions could be full of dodo…or maybe the good people of Georgia, who are quick to cry over self-administered economic woes are…YA THINK!
Betty
July 18th, 2010
8:57 pm
Yes, we shouldn’t want or allow anyone or any company to make profits. That’s just bad economics! Shame on anyone who is doing well right now. Curses to all those companies making money right now!
By the way, the lottery is a private corporation and not in the business of welfare.