Wednesday, July 6, 2005 | 9:37 a.m.
OKLAHOMA CITY -- A single sheet of white paper taped to a side entrance of a nondescript office building in Oklahoma City is one of the few outward signs that the state's new lottery is open for business.
Inside, 61-year-old James Scroggins, the state lottery's new executive director, manages a handful of staff members in temporary offices filled with surplus state furniture.
From these humble beginnings, Oklahoma's Education Lottery is expected to generate $65 million in profits in its first fiscal year that ends June 30, 2006. Once fully operational, state officials are hoping to generate up to $150 million each year for the state's educational system.
"There's a lot of things that have to happen between now and then," Scroggins said.
The former director of state lotteries in Pennsylvania and, most recently, Missouri, Scroggins is no stranger to the lottery industry. He started working at the Illinois State Lottery in 1978 and also worked for three years for an instant ticket vendor.
Scroggins' experience working for both state lotteries and vendors should prove invaluable for someone being asked to build a lottery from the ground up, said Gary Gonder, the Missouri Lottery's interim director who worked under Scroggins for 13 years.
"To be able to understand the whole operation, there's just a handful of people who have the experience he has," Gonder said. "He understands what it's going to take to get your lottery moving in a hurry. A lot of eyes are going to be on the Oklahoma lottery when it starts up, so it's important that you do a good job."
In Missouri, lottery sales over the last decade jumped more than $350 million during Scroggins' tenure, while profits increased by 78 percent. Although sales and profits declined in the last year, Gonder said some of that can be attributed to a 32 percent reduction in the operational budget over the last four years.
"Included in that, we lost over $6 million in advertising resources. It hurt our ability to communicate messages about new games and those kinds of things," Gonder said. "Those cuts are kind of catching up with us."
In Oklahoma, two separate requests for proposals already have been issued -- one for the printing, warehousing and distribution of instant tickets, or scratch-off lottery games, and another to provide Lotto-type games, or online games where customers select their own numbers or receive randomly generated numbers, and regular drawings are held.
Proposals are due July 18, and once the contracts are awarded, Scroggins said he anticipates the vendors having several employees working in Oklahoma.
A target date of Oct. 12 has been set for the sale of scratch-off games to the public, with online games expected to be operational by November, Scroggins said.
"I would expect that sometime after the first of the year, we'll try to get into one of the two big other, jackpot-type games -- either Powerball or Mega Millions," he added.
Scroggins, who earns a base salary of $175,000 a year, will receive a $25,000 bonus if instant tickets go on sale in October, and another $25,000 if online lottery games go on sale by January.
Gov. Brad Henry, who spearheaded the effort to bring the lottery to Oklahoma, said while he wants the lottery implemented as quickly as possible, he wants to be sure it's done with precision and care.
"If we have to choose a time frame on implementation, I would prefer slow and steady to anything that puts us on shaky footing," Henry said.
Once the contracts have been awarded, Scroggins said he intends to shift his focus to renovating the state lottery's office space in Oklahoma City and hiring a staff of between 100 and 130 people. He also said he anticipates opening four satellite offices across the state.
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