TALLAHASSEE, Fla. — Since the multi-state lottery game Powerball arrived in Florida a year ago, people have bought more than $430 million in tickets. But even that couldn't stop overall lottery revenue in 2009 from dropping 3 percent compared with the year before.
Lottery sales, which are usually immune from recessions, have taken a hit during the downturn. Sales have plummeted nearly $300 million since the lottery's high-water mark in 2008. It's the first significant drop since 1995.
But without the Powerball money, the decrease in sales certainly would have been worse.
"It's really allowed us to limit the decrease that I think we would have experienced had we not joined Powerball when we did," said Leo DeBenigno, secretary of the Florida Lottery. "It was really great timing, in retrospect."
State officials usually talk about the lottery in terms of the money it provides to K-12 schools, colleges and scholarships. The educational enhancement fund accounts for about 7 percent of the state's $19.8 billion education budget.
Modest Drop
For the current fiscal year, state economists predict a relatively modest drop in lottery money for the education fund: $60 million from a $1.3 billion pot of money. To keep the payouts to education from falling as quickly as sales, lawmakers raided a separate unclaimed property fund and also deeply cut into the lottery's reserves.
Rep. Alan Hays, whose legislative committee oversees the lottery's budget, said the drop in sales isn't necessarily a bad thing.
"I would hope that those who are having decreases in income realize they don't have as much discretionary income to play with," said Hays, R-Umatilla. "Instead of putting their dollars into some gambling thing, they need to put their dollars into their family needs."
More than 30 states participate in Powerball, which offers mega-jackpots at odds of 1 in 195 million. The game has resulted in 13 new millionaires in Florida. An Orlando dermatologist won the state's first jackpot, a $101 million lump-sum payment, in October.
By joining Powerball, lottery officials anticipated some people would stop playing Lotto, the state's pick-six game. But DeBenigno says there has been a net gain in revenue — combined Powerball and Lotto sales eclipse Lotto sales from past years.
But the drop in Lotto sales — roughly $275 million, or 36 percent — can still raise eyebrows.
"People are shifting from Lotto in a greater amount than we thought," said Amy Baker, the state's top economist.
Baker and gambling experts say the overall sales figures are a function of the sputtering economy. Lottery tickets are similar to other types of goods and services, says economics professor Doug Walker, who studies gambling at the College of Charleston.
"It's not surprising to me that there would be some decline in sales and revenues," he said.
But recessions didn't used to mean a drop in lottery funding. What's different this year? "It's probably because this is a more serious recession than we've seen in years past," Walker said.
Gas Stations
DeBenigno also said that this latest downturn is different because it came with a spike in gas prices. More than half of lottery retailers are gas stations.
"When you have to spend $50, $60 to fill up your gas tank, you're not in a real good mood," he said. "You're less likely to go into the store and perhaps purchase a lottery ticket."
Scratch-off tickets, which generate about half of lottery revenue, were also down nearly 10 percent in 2009. Officials expect those numbers to rebound, thanks to 1,000 new vending machines installed in October that have increased awareness of the tickets.
DeBenigno said he hopes the machines, coupled with a new promotion in the spring, will make up the expected shortfall in lottery money for education.
Thanks to Nino224 for the tip.
I don't want to beat a dead horse but I still can't help but wonder why the Lotteries never consider giving just a little better odds in their games to stimulate sales. The bad economy could even enhance sales if people felt the odds weren't so insurmountable as to preclude a chance of winning.
I wish just one state would try it if only on a temporary basis. If they advertised it adequately and stressed the fact heavily that it was now easier to win their games I think sales would take off, increasing revenue and providing the impetus for other states to follow suit.
It seems they spend all their time looking for factors to blame rather than coming up with solutions.
I totally agree they spend more time trying too make the games HARDER by adding more numbers and even if they reduce numbers they will put more in the extra ball drawing or vice-versa with the one draw games (no extra ball) they mostly add numbers.FL Fantasy 5 use too be a 5/26 and went too a 5/36 I hope it stays that way the GA version is a 5/39 I sometimes worry they might one day copy there Pick-5 set up.Our Lottery use too be a 6/49 they added 4 numbers and so far have kept it that way I guess until they really start hurting for money because of an ETREME decrease in playing they will continue doing things this way.
"I still can't help but wonder why the Lotteries never consider givingjust a little better odds in their games to stimulate sales."
"I totally agree they spend more time trying too make the games HARDER"
Why would they make the games easier to win when people voting with their money prove time and again that they prefer big jackpots with steep odds to comparatively modest prizes with better odds? Players reduced their plays on the state lotto game by $275 million but spent 64% more than that on powerball. They might not be the same players, but if your costs are the same it would be a pretty poor business decision not to trade a customer who spends $275 for one who spends $430. As players it's easy to think they've made the games too hard, but if I was running a lottery I'd wonder if they were hard enough. From that perspective the game isn't too hard until sales in big jackpot games stop outweighing th edecreased sales in smaller games.
"Why would they make the games easier to win when people voting with their money prove time and again that they prefer big jackpots with steep odds to comparatively modest prizes with better odds? Players reduced their plays on the state lotto game by $275 million but spent 64% more than that on powerball. They might not be the same players, but if your costs are the same it would be a pretty poor business decision not to trade a customer who spends $275 for one who spends $430. As players it's easy to think they've made the games too hard, but if I was running a lottery I'd wonder if they were hard enough. From that perspective the game isn't too hard until sales in big jackpot games stop outweighing th edecreased sales in smaller games."
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There are two schools of thought on that (both based on personal preference) and I would think that they are about equally supported.
Why let one game lag just because another prospers at it's expense? What have they got to lose? They know what they've got now, a game that's lost support to a game with bigger jackpots. So now that the big jackpot crowd has another option, why not try to appeal to those who are satisfied with a smaller jackpot with more frequent winners? Just knock a couple numbers off the matrix and see what happens. Doing nothing certainly won't help.
Dumb question. Wouldn't Florida also benefit if they joined another lottery, say Mega Millions? Here's their response to an inquiry I made:
"Thank you for writing the Florida Lottery. In response to your email, the Florida Lottery has made no tentative plans to launch or join MEGA MILLIONS at this time."
I'll bet they do Nino, after they let the lotto game wither on the vine for a while til it dies.
They seem to move with the speed of a three-toed sloth down there anyway. Look how long it took them to get Powerball.
Foe years I begged for PB, and they told me they'd never do it. I just wish I was within driving distance to a MM state.
Most states already have another alternative to pick 6 games. In NY you can choose from MM, lotto (6/59) and Take 5 (5/39), plus they recently added Sweet Millions (6/40). In Tennessee you can choose from PB, Lotto Plus (6/44) and pick 5 (5/39). Then there are all of the scratcher options. It sounds to me like they already have games to appeal to a wide range of jackpot preference. How many more choices do you think they should offer?
I was addressing Florida's lamentations about their pick6 specifically. It will still differ from the pick5 and the others if they knock a couple numbers off the matrix and will still have bigger jackpots. Why let it languish and die without trying to shake things up? Change is good.
"To keep the payouts to education from falling as quickly as sales, lawmakers raided a separate unclaimed property fund and also deeply cut into the lottery's reserves."
What a laugh! California did the same thing, they went and seized the contents of safe deposit boxes that were paid-up and current. Can you imagine going to your safe deposit box and seeing the locks were drilled out? There was no mistake that a loophole allowed legal plunder of private property, just like emanate domain for new pipelines, power lines and whatever you have that someone wants. This was not an isolated event and subscribers of the boxes were not in arrears or notified of any emanate looting except that somebody thought that since the box holders were not standing there, they must be abandoned property for the state to seize. Talk about dirty tricks to balance the budget. Now the PNW is the dumping ground for every welfare state that wants to lighten their load. Just like that cop killer they let out from Arkansas or where ever and let go as long as he leaves the state. That's a heads up for when the prisons decide to do more of the same. You have to live somewhere where there is lousy social services for these freaks to draw from. No greyhound line, no public transportation, No TV, water, electricity and supermarkets. And no copper or aluminum to steal.
You know I have been in South Florida since 1995 and I never hit off of Fla lotto, however, I hit more on powerball then anything else. Most of the winners are from up north like Orland and up. Not all of the winners in the powerball are from here neither. If someone hits its mostly the small amounts like 200,00 to 10,000.
I am hoping that they can do a overhaul of the fla system it sucks!!!