Gutierrez Returning to Lottery as Its Director

Responding quickly to fill a vacancy at the top of the $1.4-billion-a-year California Lottery, Gov. George Deukmejian on Tuesday appointed Chon Gutierrez, a veteran state administrator, as lottery director.

Gutierrez, 42, who since March has been undersecretary of the Youth and Adult Correctional Agency, will assume his new post later this week.

He is no stranger to lottery operations.

Before the first lottery director was appointed, Gutierrez virtually ran the fledgling state agency in early 1985. He continued to serve as chief deputy director through 1986.

Because of his experience with the lottery, both the chairman of the state Lottery Commission, William J. Johnston, and its vice chairman, John M. Price, urged Deukmejian to consider Gutierrez when filling the lottery director job.

The post opened up unexpectedly when M. Mark Michalko announced last month that he was resigning the $82,117-a-year job to become a private lottery consultant. Gutierrez’s appointment must be confirmed by the state Senate.

“I was very much a part of the creation of the California Lottery,” Gutierrez said. The challenge now, he said, is like the “traditional responsibility of running a mature organization, not unlike running the Disney corporation or Coca-Cola or any other Fortune 500 company.”

Lottery officials are pleased with the appointment.

“I’m delighted,” Johnston said in a phone interview after the governor’s office made the announcement. “He has seen the lottery grow. He knows all of the personnel and all of the operations. He understands what is required. He has my personal trust and confidence.”

Lottery spokesman Bob Taylor said the lottery’s two games--the instant scratch-off tickets and the six-number weekly Lotto--”should not miss a beat as the new director comes on board.”

With a reputation as a reliable bureaucrat and trouble-shooter, Gutierrez, one of only a few Democrats whom Deukmejian has named to a top post, has frequently been called on to take the reins of problem agencies in his 24 years of state service. Deukmejian, for example, called on him to take command temporarily as director of the Office of Economic Opportunity in the midst of a 1984 scandal, which resulted in the conviction of two anti-poverty officials on embezzlement charges.

Deukmejian also turned to Gutierrez when he needed a steady hand to help get the lottery off the ground after voters approved it in November, 1984.

More recently, the governor named Gutierrez undersecretary of the Youth and Adult Correctional Agency.

Gutierrez returns to the lottery, this time as its top executive, at a time when public interest in the games has begun to wane after a record start-up, which brought $2.1 billion in gross sales the first year.

With revenues down by a third, the Lottery Commission is looking for new ways to rekindle enthusiasm for the games, whose proceeds go partly to public education.

The commission wants to double the number of Lotto machines in retail outlets throughout the state, from 6,000 to as many as 12,000, Johnston said.

The additional Lotto retailers should allow the lottery to introduce a three-number game with fixed prizes of up to $500, improved odds for bettors, and drawings several times a week.

Johnston pointed out that Gutierrez was not considered as a candidate for lottery director in 1985 because the state was looking for someone with proven lottery experience. Instead, Deukmejian appointed Michalko, who had been the attorney for the Ohio lottery.

When Michalko announced his decision to leave last month, Deukmejian noted that he deserved credit for “his significant role in building the nation’s largest lottery.” He left to join Texas-based Travis Enterprises, a firm that is seeking potentially lucrative contracts to help other states start up lottery games of their own.