Georgia Lottery President Margaret DeFrancisco is retiring after battling for more than eight years to cover the cost of the state’s ever-more-expensive HOPE scholarship program.
DeFrancisco, 63, who is paid $378,000 a year, will stay on the job “through the transition” to a new president, officials said Wednesday.
As the second CEO of the Georgia Lottery, DeFrancisco presided over record ticket sales in fiscal 2012: from $2.6 billion a year when she took charge to $3.8 billion for the year that ended June 30. But she also headed a program that couldn’t keep up with the ballooning cost of the HOPE scholarship.
“It’s unfortunate Margaret is throwing in the towel,” said state Rep. Ron Stephens, R-Savannah, who chairs the House Economic Development Committee and who backed several bills to expand lottery sales. “She’s put a whole lot of kids through college.”
Stephens said DeFrancisco was probably frustrated by state leaders who wanted her to raise more money for HOPE but opposed new ways to sell lottery tickets, such as video lottery terminals.
“We’ve done a real good job of tying her hands,” he said.
DeFrancisco could not be reached for comment.
$7B for HOPE since ’93
The lottery was created in part to fund the HOPE scholarship, which now pays 90 percent of tuition at Georgia public colleges for in-state students who maintain a 3.0 grade-point average. Since it started selling tickets in 1993, the lottery says it has paid out $7 billion to 1.4 million HOPE recipients.
A boom in enrollment and substantial increases in tuition, however, put the scholarship on track to run out of money in 2013. To prevent it from going broke, Gov. Nathan Deal and lawmakers did away with full tuition for most recipients — the Zell Miller Scholarship still pays 100 percent of tuition for the state’s top students. HOPE payments for books and fees had already been halted.
DeFrancisco, who had been running the New York lottery, succeeded Rebecca Paul as CEO of the Georgia games in December 2003. Channel 2 Action News reported Wednesday that DeFrancisco plans to return to New York to be closer to family.
“We are grateful to Margaret for her years of exemplary service to the lottery and the citizens of Georgia,” said James F. Braswell, chairman of the lottery board.
Calls for casinos
Her exit comes as the lottery is preparing to launch Internet versions of some games and as calls for casinos or casino-type development grow louder.
The lottery board in July approved online sales of Powerball, Mega Millions and Fantasy 5 games as soon as November.
The lottery in 2011 commissioned a study showing that video lottery terminals at three venues could generate nearly $1 billion annually. The Atlanta Journal-Constitution reported this year that the lottery had hired a firm to report on details of introducing video gambling to Georgians.
Developer Dan O’Leary has long sought approval for a $1 billion gambling resort that would include video lottery terminals. Senate Majority Leader Chip Rogers, R-Woodstock, became the highest-profile advocate of expanding gambling over the summer.
O’Leary’s plan needs approval of the lottery board, which is appointed by the governor. Gov. Nathan Deal has opposed proposals to expand gambling in Georgia beyond the lottery, and the lottery board has said it is unlikely to expand operations without support from elected officials.
But a majority of Republican voters last month expressed support for casino gambling in a nonbinding referendum on the July 31 primary ballot.
O’Leary doubts a change in lottery president will affect whether his development ever gets approved.
“We’re still very optimistic our project will move forward,” he said. “[But] in the end it’s the lottery board that would be the entity that votes.”
Bonuses drew fire
DeFrancisco ran afoul of some state lawmakers in recent years for defending the lottery’s longstanding policy of rewarding staffers with bonuses. In fiscal 2009, just as the recession was hammering state government and forcing major spending cuts, DeFrancisco received a $204,000 bonus, pushing her total compensation to nearly $500,000.
During a legislative hearing in 2009, as lawmakers prodded DeFrancisco to defend her bonus, she responded: “I deserve every single penny I make and then some.”
The Legislature eventually passed legislation severely limiting lottery bonuses.
Rep. Bill Hembree, R-Winston, former chairman of the House Higher Education Committee and a longtime critic of lottery bonuses, said in August 2011 that the lottery’s bonus system “seemed kind of out of control and kind of out of touch with what the rest of the state was dealing with.”
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