Running the numbers 

It's been a rocky two years at the Arkansas Lottery office.

On Friday, Arkansas Lottery Director Ernie Passailaigue tendered his resignation to Lottery Commission Chair Dianne Lamberth. In a little over two years, Passailaigue took the lottery from an idea contained within a piece of legislation to a $460 million a year business. The Arkansas Department of Higher Education doesn't have a final tally of scholarship recipients for this fall just yet, but over 31,000 Arkansas students received scholarships to attend state colleges and universities during the 2010-2011 school year. That's an outcome universally seen as a good end. But it was the means to that end that led to continued pressure on Passailaigue, and, ultimately, his resignation.

Rumors had been swirling around for some time that the director was on his way out. Passailaigue told reporters just over a week ago that he would be leaving within the next three years. When pushed for a firm date, he said, "It might be tomorrow, it might be three years from now." Turns out it was only eight days later.

In a brief filed with the U.S. District Court, former Arkansas Lottery staff attorney Bridgette Frazier, who was forced to resign her post in November 2009, describes her tenure at the Arkansas Lottery as "falling down a rabbit hole into a bizarre wonderland populated by peculiar individuals with no use or love for state law, state regulations or native employees."

Frazier sued the lottery for wrongful discharge, violation of her First Amendment rights, deprivation of due process, infliction of emotional distress and defamation of character. The lottery has filed a motion to dismiss the case. Frazier's colorful legal writing tells the story of an organization that repeatedly failed to follow state laws, of administrators whose actions were "willful, wanton, reckless and malicious," and of state actors who "run roughshod over [Arkansas] citizens with impunity." Lottery officials have, of course, disagreed formally in court filings.

Sept. 28 marks the two-year anniversary of lottery ticket sales. In those two years, Arkansans have spent $900,646,436 on tickets (according to the latest figures available). Because of that, students started out the 2010-2011 school year with a combined $123,024,759 in scholarship funds.

But the lottery has been plagued by what former Lt. Gov. Bill Halter has charitably called "administrative hiccups" — a chief financial officer unfamiliar with generally accepted accounting principles, punitive IRS fines totaling nearly $100,000, unfavorable legislative audit findings and two attempts to oust an executive director who eventually decided to deprive lottery commissioners of the opportunity to give it a third try.

Once the Arkansas Lottery has had a few years to mature, it will be easier to look back on Passailaigue's tenure and come to a conclusion as to whether or not the decisions he made on behalf of the state were beneficial or somewhere short of that mark. One thing is for certain: two years ago things were much brighter for the lottery director.

Early media scrutiny was mostly limited to his hefty salary of $324,000 a year, a sum that lured him away from the same position in South Carolina. Passailaigue was charged with getting the lottery up and running quickly, and he did — some might say with undue haste. To hear him tell it, Arkansas's lottery enjoyed a quicker startup than any other lottery in American history.

Shortly before midnight on Sept. 27, 2009, people took their place in convenience store queues to throw money down on shiny new scratch-off tickets while visions of dollar signs danced in their heads. That first day, the lottery sold an estimated $1.2 million worth of tickets and handed out over $725,000 in prizes. At a launch ceremony held at a Murphy Oil station in Little Rock, Passailaigue handed a cigar to Halter, the man who will likely go down in history as the father of the Arkansas Lottery, and said, "We just birthed the lottery." Times were good.


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