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N.D. lottery's first year deemed 'exceptional'

Mar 24, 2005, 10:24 am

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North Dakota Lottery

Nearly a year after North Dakota unveiled its state lottery, former Gov. Arthur Link still gets annoyed waiting in line for someone else to splurge on the dream of a big payday.

It happened just the other day, Link said, when he watched a man ahead of him in a convenience store hand over $2 for a couple of slips of paper. Link is among the lottery's foremost critics.

Those with a sunnier view of the lottery point to a ledger that shows North Dakota's treasury raking in nearly $6 million since March 25, 2004, when the Powerball tickets started rattling off the distinctive red printers in stores around the state.

The first was sold to Rep. Andy Maragos, R-Minot, who led an initiative campaign that put the lottery measure on the ballot in November 2002. Voters agreed to amend the state constitution to allow the introduction of Powerball, which is played in 26 other states, including Montana, South Dakota and Minnesota.

Maragos says the lottery's earnings are proof that North Dakota has been able to lure back players who used to spend their lottery allowances in neighboring states. Maragos' wife, Sherry, works for the lottery as a customer relations specialist.

Andy Maragos said he's convinced that lottery customers have helped boost North Dakota's economy.

"They're buying gas, they're buying cigarettes, they're buying groceries - everything that efficient consumers buy when they're going somewhere to buy one thing," he said. "I think it's done everything that we thought it would and more."

North Dakota's lottery has since added two more multistate games and is easily surpassing early projections for sales, profit and participation, said Chuck Keller, the state lottery director.

The first estimates pegged Powerball's earnings for the state general fund at $1.4 million for the budget period that ends June 30. But the game earned that much profit in just three months, and Keller now expects the state to make at least $6.2 million by June's end.

Keller said a major reason for the margin is the North Dakota lottery's low-overhead operation. The office has only six employees, its computer center is in Montana, and most of the data is transmitted by satellite, which cuts down on maintenance costs.

The largest single share of money spent on tickets - 46 cents of each $1 sold - pays for prizes. The biggest North Dakota payouts so far have been from Powerball, with North Dakotans claiming $100,000 prizes three times.

Some 27 cents of each ticket dollar are diverted to the state general fund, and Scientific Games, the contractor that provides software and lottery terminals, gets about 11 cents. The 400 merchants who sell tickets each get a 5 percent commission.

So far, no one has claimed a bigger share of the $19.6 million in tickets purchased statewide than M&H Gas, a convenience store in Mandan, N.D.

"It's been interesting - not as hard as we thought it would be," Mary Junker, the store's manager, said. "The big red machine kind of scared us at first."

No matter how much players are winning, critics such as Link say the state should not encourage people to throw down their money for a remote chance at a hefty payoff.

"It's been touted as economic development so many times. But it's just people changing money, and there's nothing stable about it," Link said.

For Keller, the numbers are hard to dispute. Officials are now considering adding a fourth multistate game, called 2 by 2, but don't have a launch date to announce yet.

"The facts speak for themselves," he said. "It's been an exceptional year."

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