Attorney appointed to direct state lottery

Arkansas Scholarship Lottery tickets are shown in this file photo.
Arkansas Scholarship Lottery tickets are shown in this file photo.

Financial services lawyer J. Eric Hagler of Little Rock is the Arkansas Scholarship Lottery's new director, though he has no experience working for a lottery.

State Department of Finance and Administration Secretary Larry Walther -- who announced Gov. Asa Hutchinson's appointment Thursday -- said he hired Hagler to lead the lottery because of his experience in financial services managing larger teams.

"That was kind of what I was looking for as we had the opening at the lottery," Walther said in an interview Thursday.

"I don't have any lottery experience, but I will have, and it's going to be a fast-learning session," Hagler said in an interview in his new office.

"The goal is to provide scholarships, so it is such an unique opportunity; your mission is like no other," he said. "There is the gaming piece, that's how you fund it. But at the end of the day, you can't lose sight of what you are doing, and it's not a for-profit in the true sense, so expenses are key. The more lean we can run this organization, the more that's available for scholarships, and that's the mission.

"My really unique challenge is finding out the best way to structure the lottery for growth, because it grows more scholarships," Hagler said.

Hagler's predecessor, Bishop Woosley, resigned effective Monday after leading the lottery for more than eight years. Hagler will be paid $165,681 a year; Woosley earned $176,850, said Scott Hardin, a spokesman for the finance department.

The lottery started selling tickets Sept. 28, 2009, and has helped finance Arkansas Academic Challenge Scholarships for more than 30,000 students during nine of the past 10 fiscal years. In fiscal 2020 that ended June 30, the lottery's revenue totaled $532 million, a record high, raising $89.4 million for college scholarships. That was the sixth-highest amount in the lottery's history.

Arkansas' lottery faces increased competition with the development of full-fledged casinos in Crittenden, Garland and Jefferson counties, and the anticipated construction of a fourth casino in Pope County. Those four casinos are authorized under state constitutional Amendment 100, which voters approved in November 2018. Mississippi started a lottery in November, so all six of Arkansas' neighboring states have lotteries.

"We are proud to bring Eric home and look forward to him leading a great team of employees," Hutchinson said in the news release announcing Hagler's appointment.

Walther said he didn't think it was necessary to conduct a national search for a new lottery director, although the now-defunct Arkansas Lottery Commission conducted national searches before hiring former South Carolina Lottery Director Ernie Passailaigue as the Arkansas lottery's first director in June 2009 and then promoting Woosley from chief legal counsel to director in February 2012.

The finance secretary said he interviewed several candidates after Woosley submitted his resignation July 13. Woosley hasn't announced his next job yet.

Walther said he has known Hagler for "quite some time."

He said he introduced Hagler to Hutchinson about three years ago because Hagler was in California at that point and was interested in moving back to Arkansas.

Walther said he knows Hagler's father, Dr. Jimmy Hagler of Little Rock.

"I got a call a month or so ago and he was interested in coming back, and it was almost concurrent with what is going on with the lottery, so I put him on the list of those that I wanted to interview for that job, and that's how we ended up with him here," Walther said.

Eric Hagler, 57, said he has rented a house in west Little Rock, minutes from his father.

"We have got a team down there that [has] expertise in the different areas," Walther said. He was referring to Gaming Director Mike Smith, Chief Legal Counsel Michael Helms, Advertising and Marketing Director Donna Bragg and Chief Fiscal Officer Jerry Fetzer.

"They have done a nice job down there over the last five and a half years since it moved over to the [Department of Finance and Administration]," he said.

At Hutchinson's behest, the Legislature in 2015 enacted a law to eliminate the nine-member Arkansas Lottery Commission and shifted the lottery within the finance department to make it an executive branch agency.

"What I am wanting to look to do is look at it from a business standpoint and work with the experts that you have down there and collaborate with that organization to get their ideas, to grow that business and to do it together, because we are going into a mature phase [of the lottery] from an Arkansas standpoint," Walther said.

"I think he [Hagler] will do an excellent job of working with the existing team down there to continue what we have done over the last 11 years and make it better," Walther said.

Hagler said he was interested in the job despite his lack of lottery experience because "I have 17 years working in financial services and it is a heavily regulated industry.

"Risk management is absolutely key, the integrity of not only the platforms that you are offering people to invest in, but also the people that work there," he said. "Although they are entirely separate types of entities, the structure is very similar, so when I began looking at the opportunity and decided to put my hat in the ring, I drew the parallels."

According to his resume, Hagler has been principal consultant of EricHaglerLaw.com in Huntington Beach, Calif., since March 2017; managing director of Capital Forensics Inc. in Newport Beach, Calif., from June 2015 until March 2017; president and chief legal officer of FMSI/FMSI Advisers in Newport Beach from December 2009 until April 2015; and general counsel of Crowell Weedon & Co. in Los Angeles from September 2006 until December 2009.

Among other things, he has been general counsel of Wedbush Morgan Securities Inc. in Los Angeles from May 2004 until February 2006; magistrate judge in Bentonville from November 2000 until February 2002; attorney at J. Eric Hagler, attorney at law, since January 1996; and deputy prosecuting attorney from September 1989 until January 1996, according to his resume.

He also was a special associate Supreme Court justice from February 2003 through June 2003 after his appointment by then-Gov. Mike Huckabee to consider a court case. He is a graduate of Parkview High School, and earned a bachelor's degree in business administration at the University of Arkansas, Fayetteville, and a law degree from the University of Arkansas at Little Rock. He is married to his high school sweetheart, Sandra Woodward Hagler. The couple has three grown children.

As for any immediate changes at the lottery, Hagler said Thursday, "I would be remiss to sit here on day one, less than an hour after having walked the floor, to say I definitely see immediate change.

"A change of administration causes certain nervousness in people, so the first thing you need to assure people of, whatever was going on before I got here, today it is a clean slate, and everybody is going to get a chance, an absolute chance to shine," he said.

"There will be those who will sign on to the vision and there will be those who decide it is not for them, but every manager hopes that everybody signs on," Hagler said.

Because of his lack of lottery experience, he doesn't bring a bias about the lottery, he said.

"I have no agenda with regard to how to run the lottery other than listening to these people who are expert and finding how what is your vision ... and tie all those different visions together," Hagler said.

In June, Woosley told lawmakers that the lottery is considering implementing the game of keno, which has been opposed by some lawmakers in the past, and a digital channel as an iLottery offering.

Asked if lottery officials have ruled those options in or out, Walther said, "That's a tough one because that's political.

"There is a lot of pushback from the existing industry outside of the lottery for us not to do keno because they feel like it infringes on their business," he said.

"If we can't forge an agreement with the industry, it will be hard for us to do keno. That's just the reality of life as far as I am concerned."

Asked about the possibility of the lottery developing a digital channel as an iLottery offering, Walther said, "We would like to do that.

"Technology is going that way. The casinos are using it," he said. "We will venture into it, but only with the approval of the governor, and the Legislature will probably want some say in it as well as the industry."

The lottery is part of the "larger gaming industry here in Arkansas, and we want to be collaborative with them, that's my view," Walther said.

photo

J. Eric Hagler (Special to the Arkansas Democrat-Gazette)

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