Kathryn Densborn notified Governor Mitch Daniels of her decision. Daniels accepted her resignation from the organization.
Democrats are using the resignation to blast Daniels, though. Indiana Democratic Party Chair Dan Parker issued the following statement in response to the Friday's announcement:
"Mitch Daniels has appointed two Lottery Directors. Both cost taxpayers a lot of money and wound up resigning under clouds of scandal. They're part of a growing list of agency heads who've stepped down after making embarrassing, costly mistakes.
"At some point, you'd think Gov. Daniels would practice within his administration the same brand of accountability he preaches and writes about externally."
"I'm surprised it took this long," said political expert and IUPUI Political Science professor Brian Vargus of the resignation. "When you have an expose of spending hundreds of thousands on a new headquarters, it's immediately going to attract attention."
Vargus said that Densborn's actions highlight a problem within the Daniels administration and puts Daniels and his party in a vulnerable spot.
"The Daniels administration, despite it's ability to go on the road and sell his book, has got some problems," said Vargus. "It needs some good internal cleaning and a look at what's going on."
The Department of Administration is continuing its review of the lottery's compliance with state standards for space use and furniture and equipment purchases.
An interim director will be appointed next week until a replacement is found.