- The Washington Times - Thursday, February 9, 2012

RICHMOND — Increasing lottery sales are helping states around the country — including Maryland and Virginia — to partially compensate for the sluggish economy.

Maryland and Virginia tallied record lottery sales last year and were among 26 states that reported lottery revenue increases last year.

Virginia showed an increase of $47.6 million, or 3.3 percent, in the year ending June 30. The state generated $1.48 billion in lottery revenue, besting the record of $1.44 billion set the previous year.

And Maryland’s $1.71 billion in sales marked its 14th consecutive record-breaking year.

“It’s gratifying to have added yet another year to the record books, especially in light of the challenging economy,” Maryland Lottery Director Stephen Martino said.

Even the District is showing a modicum of optimism about future growth, reporting a 5 percent increase in lottery sales after four years of downward-trending numbers.

The city is at a significant competitive disadvantage compared with its neighbors because Maryland and Virginia have more resources to expend in the D.C.-area market on advertising and marketing, D.C. Lottery Director Buddy Roogow said.

Sales have lagged in the District because other states in the region began selling big-payout Powerball tickets. And the D.C. Council on Tuesday repealed authority for the lottery to run a first-in-the-nation online-gambling program, which was expected to generate about $13 million over four years.

Virginia Lottery Director Paula I. Otto said scratch-ticket sales and the state’s ability to introduce scores of new scratch games each year has helped its revenue tremendously. Over the past year or so, the state also added 200 retailers after losing hundreds during the recession owing to shuttered stores and closing businesses.

“Our efforts to maintain and grow our retailer base are paying off,” Ms. Otto said. “We’re very proud of the fact that this fall Virginia became only the second state in the country to sell lottery tickets at Wawa,” she said, referring to the chain of convenience stores and gas stations.

The state set a monthly record for sales in December 2011, at $149.8 million, after a $200 million Mega Millions jackpot significantly boosted sales in what is typically a strong month for lotto sales anyway. But Ms. Otto said January numbers have been flatter.

“It’s always nice to be a little bit ahead, but you never know how the ball’s going to bounce,” she said.

Lottery profits, which totaled $444 million in fiscal 2011, go toward supporting public education in the state. A record 59.4 percent of the state’s sales last year went back to players in the form of prizes, 5.3 percent went to retailers who sell tickets, and 5.1 percent went toward operational expenses.

Virginia state Sen. Frank M. Ruff Jr., Pittsylvania Republican, wants some of the lottery-revenue increases to go to localities.

At the request of the Pittsylvania County Board of Supervisors, Mr. Ruff introduced a bill to apply the state’s retail sales and use tax to lottery tickets, but it was carried over to next year. The estimated state and local revenue gain from the bill would total about $470 million over the next six years.

“I’m not sure I can see any rational reason why we shouldn’t treat it as a candy bar,” he said. “There’s some merit in it. Nobody wants to raise taxes. I would rather have that happen than have the locality have to raise the real estate tax.”

Ms. Otto said she discussed the bill with Mr. Ruff, but noted that the Virginia Lottery was neutral on the matter.

“It would be challenging to add a tax on top of the current price, especially with our vending machines,” she said. “No matter what the economy is, people go grocery shopping.”

What about the notion that economic doldrums are a boon for lotto sales?

“For some people, they have less money, so they figure, well, a lottery ticket’s something they might not need,” said David G. Schwartz, director of the Center for Gaming Research at the University of Nevada at Las Vegas. “Other people, it’s ‘Well, I have less money, so why not buy lottery tickets?’ “

“It’s also possible that people have less disposable income. They may be saving less,” he said, pointing to rock-bottom bank interest rates. “Although that’s still better than what you’d get back from lottery tickets, so who can tell?”

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