Big Business, but Chancy : Experts Wonder Whether Lottery Director’s Salary Will Attract Top Talent

Most of the country’s state lottery directors, along with representatives of a burgeoning lottery industry, gathered here Monday to advise California and three other states on how to launch their own lottery operations.

But the California officials that could most use that advice have not yet been named, although more than a month has passed since the deadline set for their appointment by Proposition 37, the state lottery initiative approved by voters in November.

Gov. George Deukmejian is still awaiting the results of security checks on the five individuals he has selected for the state Lottery Commission, said the governor’s assistant press secretary, Kevin Brett. Deukmejian has said that he will wait until the commission is in place before choosing a lottery director.

At a press conference Monday, several lottery directors complained that the California director’s salary, established by the initiative at $73,780 a year, may not be enough to attract the best candidates for the job.

And at an impromptu press conference of his own in the Capitol, Assembly Speaker Willie Brown (D-San Francisco) said that he is considering legislation to raise the $100 a day that will be paid to lottery commissioners when they are conducting lottery business.

“They are only entitled to earn $100 a day,” Brown said. “I don’t know how you get real qualified people to do that.”

When the new lottery finally goes into operation its revenues are expected to reach as much as $2 billion a year with profits of $700 million. At that point, the California lottery will “fit neatly into the top 50 corporations in the United States,” said James E. Hosker, director of the Massachusetts lottery.

Previous Experience

Proposition 37 requires that the lottery director have previous experience, and it has widely been expected that the job would be filled from the ranks of existing lottery chief executives.

Ten of those lottery directors are attending the Sacramento conference, sponsored by Public Gaming Research Institute Inc., a company that organizes meetings and publishes several industry magazines and newsletters.

In November, voters in Oregon, West Virginia and Missouri as well as California agreed to join 17 other states and the District of Columbia in what is expected to become an $8 billion-a-year business in the United States.

Operating under an initiative similar to California’s, Oregon Gov. Victor Atiyeh has already appointed a five-member lottery commission, said James Davey, who has been named assistant director for administration of the lottery in that state.

Atiyeh’s press secretary, Denny Miles, pointed out in a phone interview that the governor named the head of Oregon’s executive department as a transitional lottery director soon after the election so that the state could start up its lottery quickly. Under the Oregon initiative, the commission will have 105 days to begin sale after the commissioners have been confirmed by that state’s Senate, which is scheduled to hold hearings on the appointees this week.

In contrast, California’s lottery, despite a March 21 start-up date set by the initiative, is now so far behind schedule that it may be midsummer before operations begin.

Several bills have already been introduced in the California Legislature to alter provisions of Proposition 37, including one bill that would allow the Assembly Speaker and the president pro tem of the senate to name additional members to the lottery commission.

But Speaker Brown told reporters, “I am more interested in trying to upgrade the salary than I am in trying to get the authority for the Speaker to make an appointment (to the commission).”