Paula Harper Bethea, Executive Director of the South Carolina Education Lottery

MidlandsBiz:
Where were you born and raised?

Paula Harper Bethea:
I was born in the small town of Estill, South Carolina.  Located onHighway 321, Estill is 90 miles south of Columbia and 50 miles north ofSavannah, Georgia.  I graduated from Estill High School and earned myundergraduate degree at the University of South Carolina majoring inEnglish, a good liberal arts underpinning to the beginning of my career.

My mother was a high school English teacher.  I grew up in a householdwhere education was valued and recognized as the great equalizer.

MidlandsBiz:
Give an overview of the early part of your career.

Paula Harper Bethea:
My first job was working for the McNair Law firm.  After that, I worked for one year as Assistant to the Speaker of the House, Rex Carter.  In1969, my husband, Bill Bethea, was the first fulltime practicingattorney on Hilton Head Island.  After we married, I moved to the island where for the next thirty years I worked at our family law firm,Bethea, Jordan and Griffin, P.A.  

MidlandsBiz:
You are known for your various leadership roles across the state.  In the fall of 2011, you were awarded the Global Vision Award by the World Affairs Council.

Paula Harper Bethea:
My passion has always been education and making South Carolina a better place to live and work.   I was privileged to have been offered theopportunity to serve in a variety of leadership roles.  I owe a greatdeal to my husband who has always encouraged and supported me.  I wasthe first female Chairman of the Board of the United Way of America.  Iwas Chair of the Columbia College Board and served as Chair of the South Carolina State Chamber of Commerce Board for two years.  I have beenfortunate to stand on the shoulders of giants in this great state: BuckMikell, Bob McNair, Carroll Campbell, Jim Self, Ed Sellers, FrancisHipp, Darla Moore, Harris Pastides, John West, and Ray Greenberg, toname just a few.

MidlandsBiz:
How did your journey lead you to becoming the Executive Director of the South Carolina Education Lottery?

Paula Harper Bethea:
I have had ties to the Lottery in one form or another since itsinception.  In the late 1990’s while I was on the State Chamber Board, I became heavily involved in the fight to rid our state of video poker.  Around that same time and after the people of South Carolina voted toallow a lottery, the General Assembly approved this state run educationlottery, and in 2001, Speaker of the House David Wilkins approached meabout serving on the initial lottery commission.  It took someconvincing, but I eventually agreed.  

None of us on that first lottery commission knew the first thing aboutrunning a lottery, we had no office space, and we needed to ramp upquickly.  We took a trip to Georgia to learn Lottery 101, hired TonyCooper to head up our operations and Ernie Passailaigue to be ExecutiveDirector, found some office space, and launched our first, successfullottery game on January 7, 2002.  
Three years later, Speaker Wilkins invited me to serve on board of thenewly formed Centers of Economic Excellence, the entity that wouldoversee $30M a year of lottery proceeds earmarked to attract topresearch talent to the state.  

In June 2009, when my predecessor, Ernie Passailaigue, decided to stepdown as Executive Director of the Lottery,  Tim Madden, the Board Chairof the Lottery, asked me to take on the role on an interim basis.  Meanwhile, in a bit of serendipity, Bethea, Jordan, and Griffin hadmerged with the McNair Law Firm.  I was back where I started my career!  I called the managing partner, Bill Youngblood, to ask his opinionabout whether I should take the job.  If Governor McNair were alivetoday, he would say, yes, was his answer.   I was granted a leave ofabsence from the firm and accepted the interim position.  Two yearslater, I am still here.

MidlandsBiz:
Serving on a Board and being in charge of the day-to-day operations is a totally different proposition.    Did you have any direct management or CEO experience in your career?

Paula Harper Bethea:
I did serve as Chairman and Acting President for a while at the UnitedWay of America, but most of my experience has been at the board level.  Everything that I have done in my life has prepared me for thismanagement role at the Lottery.  Life, and business, is aboutrelationships. I was fortunate throughout my career to have built manygreat relationships and was confident in my ability to move into amanagement role at the Lottery.  

MidlandsBiz:
Why did South Carolina enact an education lottery?

Paula Harper Bethea:
Governor Jim Hodges ran his 2000 campaign on the concept of a lotterywhere all proceeds would go to help fund education.   I am proud thatthe General Assembly had the foresight to see the challenges thateducation funding would face over the next decade, and the courage toact.  

Compared to other states, South Carolina came late to the lotterydance.  Forty-one other states now have lotteries of some form oranother, not all of which are directly tied to education.  NorthCarolina launched four years ago.  

Whether it’s for philosophical or religious reasons, I am sure thatthere are those in South Carolina who do not think that we should have a state-run lottery.  However, we live in a democracy, and myresponsibility is to make sure that this lottery is a run with completeintegrity.

MidlandsBiz:
What kind of lottery games do you have?

Paula Harper Bethea:
Ours is a very traditional lottery with two main components: onlinegames and scratch off games.  Online games does not mean that you canbuy from your computer, or play online, it refers to everything that isnot one of our scratch off games.

MidlandsBiz:
How much of each dollar spent on a ticket goes towards education?

Paula Harper Bethea:
27 cents on each $1 spent goes to the state of South Carolina foreducation.  Over the past nine years, we have transferred $2.5 Billiondollars to the state of South Carolina, $1.5 Billion of which has beenin the form of scholarships to higher education and tuition assistancefor technical college.  The Lottery has also provided $600M to help fund K-12 education.

MidlandsBiz:
Where does the rest of the money go?

Paula Harper Bethea:
62 cents goes out as prizes to the players; 7 cents is paid ascommission and incentives to our retail partners (the only place wherepeople can buy a ticket); 1.6 cents goes to the gaming contracts for our instant or scratch off ticket and numbers games terminal vendors; 1.4cents goes to administrative costs; and .9 of a cent goes toadvertising.

MidlandsBiz:
How do you determine how much to give out in prizes to the players?

Paula Harper Bethea:
The Lottery is a game that depends on people playing, and people arenot going to play if they never win.   Most lotteries around the country operate with a prize cost of between 60-65%.  

MidlandsBiz:
What are your biggest administrative costs?

Paula Harper Bethea:
Gaming costs, which are more operations expenses, constitute ourbiggest expense.  These are costs that we incur to put our games on thestreet, paid mostly to our two major vendors, Intralot, who handles ouronline games, and Scientific Games, who produces our scratch offtickets.

MidlandsBiz:
Do you have any control of where education money is spent?

Paula Harper Bethea:
No, none whatsoever.  Every two weeks, we transfer funds to the stateof South Carolina and the General Assembly decides where to spend themoney.  

MidlandsBiz:
What are the key metrics that are important to your success?

Paula Harper Bethea:
Our mission is to enhance educational funding through fun andentertaining games, so we always want to offer new and interesting games that people will want to play.  When people play our games, they arenot just taking a chance, they are giving one.  We now offer twonational jackpot games, Power Ball and Mega Millions, that are verypopular.  

South Carolina is a small state of 3.8 million people.  We need tostrike a balance between attracting new players and keeping our existing players playing an appropriate number of times.  We want people to play our games and have fun, but never to the detriment of those around them that they love.  Just as some people have a propensity to drink toomuch, or to shop too much on QVC, we know that some of our players have a propensity to buy too many tickets.  March was our Play Responsiblymonth.  We want people to know that we have programs available to helpif the Lottery has become more than a game.

The most important metric for our organization is integrity, at everylevel of the organization, at all times.  That is the heart and soul ofwhat we do.  This Lottery is too important, too vital to the future ofSouth Carolina – it has to be run properly with the highest levels oftransparency.  We are very tightly regulated.  We have internal auditors who report to the commission, not to me.  We have external auditors.   And we are overseen by the Legislative Audit Council. Recently weincorrectly published the winning numbers so we paid out on two sets ofnumbers. We honor our mistakes.  

We seek to be a great corporate citizen of this state.  We check to see whether winners owe back taxes or child support.  We can access ournetwork of 3,6000 plus retailers and help spread the news about amberalerts for missing children.  

MidlandsBiz:
Are there any new games, new initiatives that you will roll out over the next five years?

Paula Harper Bethea:
From a strategic point of view, we are watching carefully the move tointernet gaming. Barnie Frank in the Congress is pushing for a state-run internet gaming model.   We at SCEL simply want to sustain our supportfor education in South Carolina.

MidlandsBiz:
What is your leadership style?

Paula Harper Bethea:
I am a hands-on leader, but not a micro-manager.  I seek to understandall levels of the organization, but I trust the people around me to dotheir job.  A leader should provide those around her with the freedom to act, and also cover when there is a problem.  The buck stops with theCEO.  I hope that I have good interpersonal skills, and a balancebetween patience and tenacity.  I have accomplished nothing on my own in my entire career.  I recognize the importance of the team around me.  

A leader needs to staff to her deficiencies.  I am not finance major;so I need to become well versed in reading financial statements, andhire a talented Chief Financial Officer.  I can assure you that thosearound me are equally or more bright than I.

MidlandsBiz:
What are a few of your favorite books?

Paula Harper Bethea:
I have read just about every business book there is to read, and I love to read autobiographies of the great leaders in history.  One lessfamiliar book that sticks out is, You Gotta Keep Dancin’, a great book about the qualities it takes to be successful, in particular, the importance of joy in your life.

MidlandsBiz:
How have you been affected by the down economy?

Paula Harper Bethea:
The economy has affected us as it has most every organization.  We arean enterprise agency of the government (similar to the South CarolinaPorts Authority) where we receive no state dollars.  We are entirelyself-sufficient.  As we have looked around and seen other companies domore with less through this downturn, we have done the same anddownsized the organization.  We have achieved this mostly throughattrition of existing staff.  Doing more with less has taken on a newmeaning, for sure.

MidlandsBiz:
How long will you stay on as Executive Director?

Paula Harper Bethea:
Leaders have a shelf life inside an organization; the trick is knowingwhat that shelf life is!  I believe that I have a good 3-5 years left in me where I can maintain a high level of energy for this organization.  Every organization needs to groom five people internally who could moveinto the role as CEO, and we are doing a good job of that here at theLottery.  

MidlandsBiz:
What are you most proud of?

Paula Harper Bethea:
I would like people in general, and the business community, to stop and think about the impact that SCEL has had on education at a time whenSouth Carolina needed it the most.  We are making a difference in SouthCarolina in an area that always has been and always will be my biggestpassion – education.