Aug 19, 2011, 8:15 am
People in Arizona are spending record amounts of money on lottery tickets, a sales surge that is surpassing that of other states.
In a recent national comparison of state lottery sales, Arizona ranked first out of 43 states and the District of Columbia in percentage increase from fiscal 2009 to 2010, according to the trade publication La Fleur's Magazine.
In fiscal 2011, which for Arizona ended June 30, the Lottery sold $584 million in tickets, its most ever.
However, the Arizona Lottery is small compared with those in other states such as New York and Massachusetts, each of which posts billions of dollars in sales each year. Arizona's spending per capita still is lower than most lotteries, too.
But state officials say the Arizona government needs the revenue it gets from Lottery sales even more in an era of budget cuts. They point to the changes made to make the games more enticing to players, such as improving odds of winning, selling new kinds of games and improving displays.
The Lottery also has added retailers.
The changes were especially important in the face of a weak economy that has consumers cutting their spending.
"We knew we would have to act to counteract the recession, especially in Arizona," Executive Director Jeff Hatch-Miller said. "We knew we had to really get out there and start listening more clearly to the players."
Last year, the Lottery started participating in the multistate Mega Millions jackpot game.
In 2008, it added $20 instant "scratcher" tickets to its games, which also had tickets ranging from $1 to $10. Hatch-Miller said the Lottery also made games and retailer displays more visually appealing.
In 2010, the Auditor General's Office suggested the Lottery increase the number of retailers where people could buy tickets.
It added 97 new locations that brought in an additional $2 million in sales in fiscal 2011, Deputy Director Karen Emery said.
Hatch-Miller said lottery tickets are sold in every community in Arizona at 2,800 retailers.
Also, over the past few years, Hatch-Miller said, the state Lottery improved the average odds of winning to about 69 percent from about 60 percent. More expensive tickets have slightly better-than-average odds.
"When times are tough, people need a good rate of return if they're going to play the game," Hatch-Miller said. "It's better that they play the game — even though (the state) gets a slightly smaller percentage — than they don't play it at all."
Not everyone agrees.
Steve Voeller, president of the Arizona Free Enterprise Club, a tax watchdog and free-market policy group, questions why Arizona officials deliberately encourage spending on gaming during an economic downturn.
"That's like a tobacco executive saying, 'We have to be more creative on how to get more kids smoking,' " Voeller said.
"I am all for people participating in what they want to, but I don't think the state should be in the business of running gambling to make money and especially trying to get more people hooked on this activity."
Voeller said that it's "unfortunate" that more people seem to be playing, given the shakiness of the U.S. economy.
"Maybe it's out of desperation, or they are hoping to get rich quick," Voeller said. "But the odds of winning aren't good, and it's a very expensive activity."
Hatch-Miller said he wouldn't want people to play lottery games if it might damage their economic security.
Rob Stepp of Phoenix said he usually plays the jackpot games every week he has extra cash.
"If I've got the money, I'll play," Stepp said. "But if I can't afford it, I won't."
Stepp said he doesn't play for entertainment — he wants to win. But he hasn't seen any big returns yet.
Total lottery sales nationwide fell slightly in 2009 after years of straight growth, according to the most recent information from the U.S. Census.
Forty-three states and the District of Columbia have lotteries. For per capita sales, Arizona's relatively small lottery ranked 35th out of 44 in fiscal 2010, according to La Fleur's. But for sales growth, Arizona ranked first, increasing 14 percent from 2009 to 2010.
During that time, 28 lotteries had sales growth. Most grew 1 to 7 percent.
The beginning of the fiscal year varies among state lotteries, so the numbers don't compare exactly with the same time periods.
La Fleur's hasn't published state-by-state lottery-sales information for 2011. But the Arizona Lottery reports total sales rose 5.6 percent from fiscal 2010 to fiscal 2011.
July marked the Arizona Lottery's 30th anniversary. Since 1981, it has sold $8.5 billion in tickets.
The Lottery has given $2.7 billion to the state.
A portion of Lottery sales benefits the general fund and a variety of state programs aimed at improving community health and transit systems, protecting wildlife and developing the economy.
In fiscal 2011, of the $584 million in ticket sales, the Lottery sent a record $146 million (25 percent) to the state, $105 million of which went into the general fund.
It paid out nearly $363 million (62 percent) in prizes and $39 million (7 percent) in commissions to retailers who sell tickets. It spent the rest on operational costs.
The rising sales were welcomed by the state, Hatch-Miller said.
"Even though there was a recession and times were tough, that meant for us that the state needed that money even more," he said.
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