Georgia Lottery turns 20

Scratch-off lottery tickets at Scientific Games in Alpharetta. PHOTO: Brant Sanderlin /

Scratch-off lottery tickets at Scientific Games in Alpharetta. PHOTO: Brant Sanderlin /

On June 29, 1993, former Gov. Zell Miller bought the first lottery ticket ever sold in Georgia.

Twenty years later almost to the day, Miller, Gov. Nathan Deal and host of other dignitaries will gather Wednesday to celebrate how far the Georgia Lottery has come.

Tens of billions of dollars in ticket sales by what is now one of the top-ranked lotteries in the world are just the start. Through its groundbreaking ties to education, the lottery has created a full generation of young Georgians who’ve used its proceeds on both ends of their schooling.

Just 3 when her mom graduated from college, Hunter Pope attended the state’s fledgling pre-k program for free after the lottery began pumping money into it and a new college scholarship called HOPE — Helping Outstanding Pupils Educationally.

She graduated from Valdosta High School last month with a 4.0 grade point average and the promise of nearly a full ride from the state for college. Paid for, just like her pre-k class, through the lottery.

“I used HOPE to motivate her and told her early on she needed strong grades so she could get this scholarship,” mom Jessica Pope said of her daughter, who has qualified for the full-tuition Zell Miller Award — a version of the HOPE Scholarship for high achieving students — and received other scholarships to help pay for books and fees.

No one knew in 1993 how the Georgia Lottery would do. After prize money and operating expenses are subtracted, it drives more than $900 million annually into state coffers toward what are now premier education programs.

Almost 3 million students over the years have benefited from one, the other or, like Hunter Pope, both.

The Georgia Lottery Corp. is one of the nation’s top five by per capita total sales — about $391 spent annually for every Georgian. Despite record revenue, however, ever-rising college enrollment and tuition has kept it straining to keep up with its main mission: funding the HOPE Scholarship and statewide pre-k programs.

It faces continued scrutiny about how it should cope with the demands of that mission. It has withstood controversies that include how it rewards employees with financial bonuses.

The lottery must also fight a never-ending battle to sell itself.

It has offered more than 900 games and regularly does market research to ensure its “product” is fresh and convenient.

In November, Powerball, Mega Millions and Fantasy 5 became the first games sold online. Others may follow, with distribution also being considered through mobile devices. The expansion coincided with the launch of the lottery’s new iHOPE debit card, which can be used for online and, eventually, retail transactions.

Earlier this year, Gov. Nathan Deal and lawmakers gave the lottery control and enforcement power over video poker machines, in part to push more money toward HOPE and pre-k.

“We understand the demand for HOPE and pre-k continues to grow, and so we will be looking for opportunities to grow our business with integrity,” Georgia Lottery president and CEO Debbie Dlugolenski Alford says.

“Technology is opening up amazing avenues for us to do business differently,” says Alford, who took the reins in October from lottery veteran Margaret DeFrancisco.

Gateway to gambling?

Despite its successes, the Georgia Lottery had opponents when it started and still has them today. The constitutional amendment to allow it passed by a scant 100,000 votes, with moral concerns about gambling dominating anti-lottery sentiment.

“I still oppose it,” says Ray Newman of the Georgia Baptist Convention. “I felt like it was just a gateway to more gambling, which has proved to be true.”

More than $13 million in tickets sales shattered expectations on the first day of sales in June 1993, and within months the first dollars were flowing to pre-K programs and college students. That put to rest any lingering debate over its existence. Says Newman: “I’d love to see it reversed, but we’re not talking about that.”

Vanderbilt University’s Will Doyle, who studies lottery scholarships and merit aid, says Georgia was the first broad-based merit aid program in the nation designed to go after a large portion of high school graduates. Other states, he added, have “emulated Georgia’s design to such a degree that the motto was: ‘What Would Georgia Do.’”

One of the keys, says Doyle, is how Georgia structured its law. It ensures a relatively independent, business-like entity, earmarks funding for specific programs and bars the money from being spent elsewhere.

Profits going toward education programs have increased 17 out of 19 years, with 1998 and 2011 the only exceptions. Lottery officials say they are on track for another increase this fiscal year, which ends June 30.

Only three people have led the lottery since its inception; as it happens, all three have been women.

‘Collaborative’ management

It “has been managed in a way that is distinctly collaborative and intuitive,” said Terri Markle, president of the Maryland-based TLF Publications, which publishes La Fleur’s Magazine and other guidebooks about the industry’s statistical data. Markle’s publications, which track 180 lotteries worldwide, puts Georgia among the top 10 by per capita total sales among its peers worldwide — and 17th in gross total lottery sales a year.

Alford, who previously led the governor’s Office of Planning and Budget, had been on the lottery’s governing board but had no other industry experience before taking the job. Deal supported the move.

But the lottery is not immune from politics. Various lawmakers over the years have called for more legislative oversight — calls that crescendoed two years ago when the lottery awarded hundreds of thousands of dollars in bonuses while other state agencies slashed budgets.

A new law in 2011 curtailed the bonuses. Some lawmakers grumble that lottery prize payouts are too high given funding needs of the education programs it supports. The law targets 35 percent of revenue to education programs, but it allows wiggle room and the percentage was 25 in the last fiscal year. Lottery officials cite studies showing smaller prizes hurt sales.

Notwithstanding such issues, the lottery has broad support.

Deal was a state senator when the legislature decided to put it before voters.

“We had modest expectations at that time,” he told The Atlanta Journal-Constitution. “The success of the program is undisputed.”