$165,000 salary OK’D for new lottery chief

Committee also gets IRS penalty update

A legislative committee Tuesday signed off on the Arkansas Lottery Commission’s plan to pay Director Bishop Woosley a salary of $165,000 a year, retroactive to his Feb. 11 hiring date.

Arkansas lottery law sets the maximum annual salary for the director at $354,007. Any salary above $141,603 a year requires the approval of the Arkansas Lottery Commission Legislative Oversight Committee.

Commission Chairman Dianne Lamberth of Batesville told the committee in a letter dated Feb. 14 that she authorized increasing Woosley’s $ 115,644- a year salary as chief legal counsel to $141,603 a year as director because the Legislature was amid its fiscal session at that time.

On Tuesday, the committee approved Woosley’s salary level after only one question from lawmakers: What was the former director’s salary?

Former Director Ernie Passailaigue’s salary was $326,832 a year when he resigned on Oct. 3 after more than two years of guiding the development of the lottery.

Woosley’s $165,000 is lower than the salaries paid to lottery directors in 10 other states, according to information provided to the Lottery Commission. New Mexico’s lottery director also is paid $165,000 a year.

Passailaigue was hired in June 2009 at $324,000, the

third-highest compensation package among the nation’s 44 lottery directors at that time.

Shortly thereafter, he hired two of his former colleagues at the South Carolina lottery as vice presidents for Arkansas’ lottery. One of them, David Barden, resigned Sept. 30, 2011, and the other, Ernestine Middleton, was terminated on Oct. 5, 2011. Barden and Middleton were each paid $225,655 a year when they departed.

Woosley, who has worked for the lottery since July 2009, told lawmakers that he doesn’t intend to fill either vice president post and estimated the lottery’s administrative cost savings at about $600,000 to $650,000 a year because of the departure of the lottery’s top three administrators last fall.

Rep. Matthew Shepherd, R-EL Dorado, asked about the status of the lottery’s appeal of penalties of about $98,000 to the Internal Revenue Service for paying federal taxes late on prizes paid to players.

Woosley said an attorney representing the lottery “made an oral appeal ... and would be submitting some type of formal written appeal soon.”

Rep. Mary Lou Slinkard, R-gravette, wondered about discussions regarding allowing the use of debit cards to purchase lottery tickets.

During the first eight months of this fiscal year, the lottery has raised $60.9 million for scholarships, according to lottery spokesman Julie Baldridge.

Woosley said he told the commission briefly during his Feb. 11 interview that at some point the commission should consider allowing the use of debit cards to purchase tickets.

Arkansas law allows tickets to be purchased with cash only, he said.

He said the commission would have to decide whether to seek a change in the law before asking the oversight committee to consider recommending that the Legislature change the law.

But Sen. Randy Laverty, D-jasper, asked the committee “to not allow people in Arkansas to gamble on their credit with the debit or credit cards.”

He said he lived in Las Vegas for three years, and “I think it’s a slippery slope.

“But if you allow people to gamble on credit, I think that’s a precedent that I hope Arkansans don’t move towards,” Laverty said.

Afterward, Woosley said Laverty mentioned “credit” in his remarks.

“So what I am talking about is debit cards, which are connected to an actual bank account where money is involved,” Woosley explained. “But I respect his position and understand it.”

Committee co-chairman Sen. Johnny Key, R-mountain Home, said in an interview that “We need to look [ at the debit-card issue] very closely.”

He said one lawmaker indicated that some bankers have called with their concerns and are opposed to allowing the use of debit cards to purchase lottery tickets, and consumers say they favor it.

“It is too big of an issue just to give a blanket ‘I am for it or against it.’ We really need to look at a lot of issues on that before we move forward one way or the other,” Key said. “I don’t think we even know what all the issues are.”

According to Woosley, 34 of the nation’s 44 lotteries allow debit-card ticket purchases, and many of the 34 allow lottery retailers to decide whether to accept debit cards.

Woosley told lawmakers that the lottery’s February ticket sales of $49.1 million were a monthly record for the lottery, beat the previous record by more than $2 million and exceeded last February’s sales by about $8 million.

Last month, the lottery raised $9.7 million for college scholarships, which was the fifth-best month for the lottery, he said.

“We can probably attribute that to obviously the fact that we had a Powerball jackpot of $325 million that was hit on Feb. 11,” Woosley said. The lottery has seen an increase in numbers of game ticket sales as a result of the Powerball tickets increasing in cost from $1 to $2 and an increase in jackpots starting in January, he said.

During the first eight months of this fiscal year, the lottery has raised $60.9 million for scholarships, according to lottery spokesman Julie Baldridge.

Woosley has said he hopes to raise at least the amount the lottery raised last fiscal year, $94.2 million.

Woosley said there has been “a great demand since we started for an actual Arkansas jackpot game.”

This fall, the lottery plans to start a five-digit draw game with a $1 ticket, he said. The draws will occur six nights a week and the jackpot will start at $25,000, and it’s estimated that the average jackpot for the winners will be about $158,000, he said.

Woosley

Key