Conversations
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 on Highway 321, Estill is 90 miles south of Columbia and 50 miles north of Savannah, Georgia. I graduated from Estill High School and earned my undergraduate degree at the University of South Carolina majoring in English, a good liberal arts underpinning to the beginning of my career.
My mother was a high school English teacher. I grew up in a household where 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. In 1969, my husband, Bill Bethea, was the first fulltime practicing attorney 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 the opportunity to serve in a variety of leadership roles. I owe a great deal to my husband who has always encouraged and supported me. I was the first female Chairman of the Board of the United Way of America. I was Chair of the Columbia College Board and served as Chair of the South Carolina State Chamber of Commerce Board for two years. I have been fortunate to stand on the shoulders of giants in this great state: Buck Mikell, Bob McNair, Carroll Campbell, Jim Self, Ed Sellers, Francis Hipp, Darla Moore, Harris Pastides, John West, and Ray Greenberg, to name 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 its inception. 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 to allow a lottery, the General Assembly approved this state run education lottery, and in 2001, Speaker of the House David Wilkins approached me about serving on the initial lottery commission. It took some convincing, but I eventually agreed.
None of us on that first lottery commission knew the first thing about running a lottery, we had no office space, and we needed to ramp up quickly. We took a trip to Georgia to learn "Lottery 101", hired Tony Cooper to head up our operations and Ernie Passailaigue to be Executive Director, found some office space, and launched our first, successful lottery game on January 7, 2002.
Three years later, Speaker Wilkins invited me to serve on board of the newly formed Centers of Economic Excellence, the entity that would oversee $30M a year of lottery proceeds earmarked to attract top research talent to the state.
In June 2009, when my predecessor, Ernie Passailaigue, decided to step down as Executive Director of the Lottery, Tim Madden, the Board Chair of the Lottery, asked me to take on the role on an interim basis. Meanwhile, in a bit of serendipity, Bethea, Jordan, and Griffin had merged with the McNair Law Firm. I was back where I started my career! I called the managing partner, Bill Youngblood, to ask his opinion about whether I should take the job. "If Governor McNair were alive today, he would say, yes," was his answer. I was granted a leave of absence from the firm and accepted the interim position. Two years later, 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 United Way 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 this management role at the Lottery. Life, and business, is about relationships. I was fortunate throughout my career to have built many great relationships and was confident in my ability to move into a management 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 lottery where all proceeds would go to help fund education. I am proud that the General Assembly had the foresight to see the challenges that education funding would face over the next decade, and the courage to act.
Compared to other states, South Carolina came late to the "lottery" dance. Forty-one other states now have lotteries of some form or another, not all of which are directly tied to education. North Carolina launched four years ago.
Whether it's for philosophical or religious reasons, I am sure that there are those in South Carolina who do not think that we should have a state-run lottery. However, we live in a democracy, and my responsibility is to make sure that this lottery is a run with complete integrity.
MidlandsBiz:
What kind of lottery games do you have?
Paula Harper Bethea:
Ours is a very traditional lottery with two main components: online games and scratch off games. "Online" games does not mean that you can buy from your computer, or play online, it refers to everything that is not 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 for education. Over the past nine years, we have transferred $2.5 Billion dollars to the state of South Carolina, $1.5 Billion of which has been in the form of scholarships to higher education and tuition assistance for 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 as commission and incentives to our retail partners (the only place where people can buy a ticket); 1.6 cents goes to the gaming contracts for our instant or scratch off ticket and numbers games terminal vendors; 1.4 cents goes to administrative costs; and .9 of a cent goes to advertising.
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 are not 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 our biggest expense. These are costs that we incur to put our games on the street, paid mostly to our two major vendors, Intralot, who handles our online games, and Scientific Games, who produces our scratch off tickets.
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 state of South Carolina and the General Assembly decides where to spend the money.
MidlandsBiz:
What are the key metrics that are important to your success?
Paula Harper Bethea:
Our mission is to enhance educational funding through fun and entertaining games, so we always want to offer new and interesting games that people will want to play. When people play our games, they are not just taking a chance, they are giving one. We now offer two national jackpot games, Power Ball and Mega Millions, that are very popular.
South Carolina is a small state of 3.8 million people. We need to strike 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 too much, 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 Responsibly" month. We want people to know that we have programs available to help if the Lottery has become more than a game.
The most important metric for our organization is integrity, at every level of the organization, at all times. That is the heart and soul of what we do. This Lottery is too important, too vital to the future of South Carolina – it has to be run properly with the highest levels of transparency. 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 we incorrectly published the winning numbers so we paid out on two sets of numbers. 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 our network of 3,6000 plus retailers and help spread the news about amber alerts 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 to internet gaming. Barnie Frank in the Congress is pushing for a state-run internet gaming model. We at SCEL simply want to sustain our support for 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 understand all levels of the organization, but I trust the people around me to do their 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 the CEO. I hope that I have good interpersonal skills, and a balance between 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, and hire a talented Chief Financial Officer. I can assure you that those around 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 less familiar 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 are an enterprise agency of the government (similar to the South Carolina Ports Authority) where we receive no state dollars. We are entirely self-sufficient. As we have looked around and seen other companies do more with less through this downturn, we have done the same and downsized the organization. We have achieved this mostly through attrition of existing staff. Doing more with less has taken on a new meaning, 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 knowing what 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 move into the role as CEO, and we are doing a good job of that here at the Lottery.
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 when South Carolina needed it the most. We are making a difference in South Carolina in an area that always has been and always will be my biggest passion – education.
