February 16, 2024
NASPL Insights Online
In December, Texas Lottery Executive Director Gary Grief announced he would be retiring at the end of February. It brings to an end a remarkable career in the lottery industry that saw him lead one of the world’s largest lotteries to new heights despite local challenges, while being at the forefront of several industry initiatives necessary to keep lotteries relevant in a time of rapidly-changing consumer preferences.
Grief was a member of the original task force that researched and launched the Texas Lottery in May 1992, at which time he was named the Manager of Claim Centers. He became Lottery Operations Division Director in 1997 and took the helm as Executive Director in March 2010. Along the way he spent three separate terms as Acting Executive Director. For the industry, he helped bring about the cross-selling agreement that allowed for Powerball and Mega Millions to be sold in every jurisdiction. He served terms as President of the North American Association of State and Provincial Lotteries, as President of the Multi-State Lottery Association, and as Lead Director for the Mega Millions consortium.
In a recent interview with Insights editor Patricia McQueen, Grief reflected on his long career at the Texas Lottery and on the industry he has served.
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In your more than 32 years at the Texas Lottery, what have been your most memorable moments?
I’ll mention a couple of things, reflecting the best of times and the worst of times. My most memorable moment occurred on my birthday back in 2002. I was serving as our Lottery Operations Division Director, and our Executive Director at the time unexpectedly stepped down. During that day’s Texas Lottery Commission meeting, I was appointed as Acting Executive Director. That was something I was not aware was going to occur until moments before that meeting began! Little did I know at the time what the future held for me in this wonderful industry.
A very close second in terms of most memorable moment, but in a completely different way, came as a result of the periodic sunset review as required by Texas law. In 2012, when the legislative bill came up for a vote in the House to keep the Texas Lottery, surprisingly the House voted the Lottery out of existence. I was in the state capitol cafeteria that morning, and started receiving condolences from people around 10am. Those lasted until about 4pm. We had stayed there, not knowing what might happen, when the House surprisingly reconvened. They reconsidered the Lottery bill and resurrected the agency from the dead. There wasn’t sufficient money in the state budget to plug the hole that eliminating the Lottery would leave!
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Texas has led the way in retail modernization, working with vendor partners and corporate chains to launch Receipt Ticket and QUICKTICKET. Just how significant have those efforts been for Texas and for the lottery industry as a whole?
I put these types of initiatives in the category of “required game changes,” and it’s important to note that we are all working in partnership with NASPL to make them happen. The lottery industry is notoriously slow to change and adapt to the needs and wants of our retailers and our players. So, while neither Receipt Ticket nor QUICKTICKET are the panacea for our modernization requirements, they are both playing important roles in pushing the industry to make incremental changes. Our industry simply has to make lottery a completely ubiquitous product at retail if we want to continue to be a viable source of revenue.
We are just getting started on the instant ticket side, deploying in-lane scratch ticket dispensers here in Texas, but the bottom line is that the industry has to change the way we use barcodes on scratch tickets in order to make them work within a retailer’s POS system. Tremendous work is being done by everyone involved, but it’s a very complex initiative.
I’m looking forward to watching from the sidelines and seeing how all this progresses. Importantly, I encourage lotteries to not focus on the initial sales, because this is all for the development of new ways to offer our products to an ever-larger universe of retailers. That’s how we remain relevant.
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Are there any other developments you’ve seen over the years that have been impactful in one way or another, not only for Texas but for the greater lottery industry?
A few come to mind. First are higher price points for scratch tickets. About 15 years ago, people said I was crazy to introduce the first $50 scratch ticket. You take a look around today, and almost every successful lottery has either launched a $50 ticket or is in the planning stages. And those games almost always become one of the most successful games in their history, if not the most successful. In Texas, we’ve repeated that experience with a $100 game, and other lotteries are starting to follow suit once again.
Staying on the scratch ticket side, several years ago I changed the way we do procurements for ticket printing. Rather than take the old traditional approach of using just one of the three available scratch ticket printers, or maybe have one primary with another as backup, I decided to allocate about one-third of our business to each of the three printers (Scientific Games, Pollard Banknote and IGT). That means that they complete for our business every day, rather than for a contract just once every few years. That was one of the best decisions I ever made, because now Texas gets each of these printers’ best-in-class products as soon as they become available. The proof of that success has been reflected in our tremendous scratch ticket growth over time.
There’s one more innovation here that is currently in motion. I’m a big believer in finding a way for players to claim their lottery prizes via their mobile devices. We’ve already done a stealth launch of this technology in Texas. As we learn from this initial effort, we continue to expand the capabilities of the system, and will be doing a full-blown launch sometime soon. Much like the in-lane approach I mentioned earlier, this technology is not only tremendous, it’s necessary to keep up with the modern lottery player and the way they want to conduct business with us. I’m so excited about the future of mobile prize payouts.
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What have been the biggest challenges in running the Texas Lottery? And what challenges will your successor likely face?
It should be no surprise that far and away the biggest challenge facing the Texas Lottery has always been our own political environment. Even with 15 straight years – and counting – of record sales growth in Texas, I will go to my grave always wondering what our team could have achieved if it would have received any level of support from our Texas legislature. Continually reducing our advertising budget, reducing our ability to pay for the printing of scratch tickets, criticizing the lottery for identifying and using new technology to distribute our products, or just generally denigrating the Texas Lottery and our reputation in public – all that wears an organization down, and it’s not getting better anytime soon. The Texas Lottery is currently going through another sunset review, with the first report expected this spring. But our entire team is very resilient, and they take a tremendous amount of pride in the revenue that we are generating for education and veterans. I’m confident that the team that I’m leaving behind at the Texas Lottery can weather the storms.
Assuming the Texas Lottery continues, the big challenge on the horizon is preparing the RFP for our lottery operator. As you know, we outsource much of our operations, and the contract currently held by IGT is coming up for bid again. Work on the RFP is already well underway, and the document should be issued in 2025.
And as with any lottery, there’s always the pressure of keeping sales and revenue growing no matter the environment. We never know what each legislative session will bring, given the near-constant pressure by other gaming operators to bring in sports betting or casinos. If they are eventually successful, they will provide new challenges to the incoming Executive Director of the Texas Lottery.
What about the challenges and opportunities for the lottery industry in general?
Aside from the retail challenges and opportunities I mentioned earlier, there is one other thing I really want to emphasize. Back in 2010, with a few of us leading the charge, lotteries pulled off a minor miracle in getting the Powerball and Mega Millions cross-selling agreement in place. That, along with moving to the $2 price point, was a tremendous windfall for every lottery as we quickly set new jackpot and sales records. I truly believed at that time that we were very close to bringing all these lotteries under one umbrella organization. I might be the only person who has served as both the Lead Director of the Mega Millions consortium and as the President and Game Group Chair for MUSL and Powerball. So, I’ve seen up close and personal not only how effectively both groups can operate, but also how much more effective and efficiently the groups could operate if they were completely unified. I’m encouraged and optimistic that a new generation of lottery directors are going to recognize this opportunity and move us towards one national lottery game organization. That single move will bring an incredible amount of new synergy to the U.S. lottery market. I’m going to be watching closely, and cheering hard for that to occur.
What do you want your legacy to be on your retirement from the Texas Lottery?
Setting aside all the revenue records and the other accolades that come from running one of the top lottery organizations in the world for a long period of time, I mainly would like to be remembered as a person who was fair, and consistent, in how I handled my business. That I was respectful to everyone, not just those in our organization, but also to those in the vendor community. And that I also constantly tried to push the industry forward in a positive direction.
What’s next for you?
First, let me say that by far the most difficult part of retirement will be the sudden loss of people that I’ve known and associated with for so many years. That’s the reason that I wanted to announce my retirement at a conference in December. That allowed me three precious days to say goodbye to so many wonderful people that I’ve come to know in our industry.
Looking to the future, I’m just planning on enjoying life and family. My three grown children all live here in the Austin area, along with my three granddaughters. That group, which will continue to grow, is going to keep me very busy. My wife Lisa and I also love to travel; we’ve already got trips to Mexico, Hawaii and the Mediterranean booked, with several more to follow after that! Our entire family also enjoys a second home that we have on Lake LBJ in Horseshoe Bay, Texas, which is about 45 minutes from Austin. That’s a real slice of heaven all to itself.