Jul 23, 2012, 8:39 am
The Montana Lottery celebrated its 25th anniversary late last month with parties at retail locations around the state and knowledge that it was on a roll.
"We had a successful first 24 years," said Montana Lottery Director Angela Wong, who's been in the role 18 months. "And we just completed a record fiscal year, with sales of more than $50 million for the first time and weekly sales exceeding $1 million for an unprecedented 19 weeks."
Fiscal year 2012 ended June 30, and preliminary data indicate lottery sales of up to $52 million, or $5 million more than the previous high in 2010. Most years the lottery sees just three or four $1-million-plus sales weeks.
Wong credited the banner year to "a number of projects doing well."
They included a successful launch of more scratch games, a near sell-out of the year-end Montana Millionaire game and a huge spring build-up in sales for the multi-state Mega Millions lotto. It reached a world record jackpot of $640 million.
"We've trended upward with lottery ticket sales, even during recession years," said Marketing and Sales Director Jo Berg, in part because the staff expanded lottery offerings, including $5, $10 and $20 scratch tickets.
Montana Lottery ticket sales climbed in 11 of the last 13 years, from $30.2 million in 2000 to the projected $52 million in 2012.
Over the last 10 years an average of 52 percent of sales revenue was returned to players in prizes, exceeding the 45 percent required by law. The lottery sent more than $10 million to the state general fund annually for six years.
Most Montanans play lottery at least occasionally, though game themes are changed often to retain interest, Berg said. She likened it to auto makers changing car colors "to create excitement and prevent boredom."
A 2005 market survey showed 65 percent of Montana adults had played the Montana Lottery, including 50 percent who'd played in the past year, said Daniel Iverson, lottery communications director.
Those playing in the last year reported spending an average of $107.50.
Like residents of other states, Montanans queue up to buy lotto tickets when jackpots get enticingly big.
Montana had a record nine straight weeks of $1 million ticket sales in the spring, capped with a weekly record of $2.7 million the week the huge Mega Millions jackpot was drawn, Berg said.
Strong early support
Montana voters approved a legislative referendum creating the lottery in November 1986 by a sweeping 69-31 percent majority.
The first game, a simple Pot of Gold scratch-off ticket, went on sale June 24, 1987.
The Montana Lottery generated $26.2 mi1lion in sales its first year, with $8.4 million going to the state Teachers Retirement Fund.
In comparison, Montana Lottery generated $46 million in sales in fiscal year 2011 from 24 scratch games, five lotto games and three other games issued at retail store terminals. About $10.8 million in profits were transferred to the state general fund.
The lottery was approved during a decade of economic retrenchment in Montana, with the Anaconda Co, mine and refineries closed, farm and ranch prices down and the faltering of an earlier oil and gas boom.
Education leader and occasional lottery critic Eric Feaver said the measure passed with strong support of the gambling industry, which saw the innocuous lottery as a way to soften Montanans toward further expansion of video gambling in casinos.
As first drafted, lottery profits were to go to the state teachers retirement fund, a way to help keep local property taxes down.
Feaver, then president of the Montana Education Association joined with Jim McGarvey of the rival Montana Federation of Teachers to decry a TV ad that implied the lottery paid teacher salaries.
The recipient of lottery profits soon was switched to the Office of Public Instruction to help equalize school funding and later to the Board of Crime Control to help build youth centers.
Since 1995, all lottery transfers to state government have gone to the state's general fund.
The lottery contribution is small — just $11 million last year going to the $1.75 billion general fund that finances much of state government.
"It's like tucking away nickels compared to the amount of money expended to run the state," said Feaver.
"It isa relatively small amount compared to the state general fund," lottery spokesman Iverson said. "But we're doing as well as we can. We're thankful to our players and retail outlets that help us achieve strong sales."
"It's a positive addition to the state budget and people are playing with discretionary money," Wong said. "We're clearing a 20 percent profit for the state each year, which would be pretty good for a business."
The small agency kept its operating expenses steady over 25 years, with 33 employees maximizing state returns by creating new games and insuring lottery security and integrity, she added.
Retailers have mixed views
Some 800 retailers statewide sell tickets, primarily convenience stores and groceries, but also a couple of hundred bars and casinos, Iverson said.
The Montana Lottery website touts participation as a way for retailers to grow their business.
"By providing your customers a chance to play the lottery, you'll give them more reasons to visit, stay and return to your business," it says.
The website cited surveys showing:
The Montana Lottery pays retailers a 5 percent commission — or a nickel on every $1 ticket sold — plus small incentives for increased sales.
Great Falls business people gave the lottery mixed reviews.
Convenience store owner David Keith stopped selling lottery tickets at Keith's Country Store, 1621 10th Ave. S., eight years ago because he didn't think the revenue was enough to justify the extra effort.
"Dealing with lottery sales during busy times kept us from helping other customers," Keith said. "It was too time consuming for so little money."
In a few cases, clerks didn't print the ticket numbers buyers selected and the store had to buy the tickets, he said.
When Montana Lottery officials tried to recruit the store back to the fold a few years ago, Keith put it to a vote of his clerks, saying he would turn modest profits over to them. They voted it down, he said, because dealing with lottery sales "was too much hassle in addition to other duties."
Two other business people agreed ticket sales can get hectic when jackpots rise and they have to bring in extra clerks, but said it's a service customers like.
Judy Schulte said she and husband, Mark, have sold lottery tickets for most of the 22 years they've owned Schulte's 38th Street Store, 3800 3rd Ave. S.
They got national publicity in 2001 when a clerk accidentally threw away a customer's $100,000 ticket. Judy tracked the garbage truck by phone and Mark sifted through bags of garbage to recover the winning ticket.
"We get 5 percent of ticket sales, whether they win or not," Judy Schulte said. "But the state provides the equipment, tech support and supplies."
"We're not sure the proceeds pay for the cost of clerks' time or power to run the lottery console," she said. "But it's an enjoyable service we provide in hopes that customers buy other products in the store. Most do, some don't."
Store clerk Danielle Coombs said it was "intimidating" learning how to dispense lottery tickets properly, but she learned a fail-safe feature of the console.
The clerk enters a customer's ticket requests on this back-up "play for view" screen first, reads the order back to make sure it's correct and then prints tickets.
"It's fun if there's a big rush on tickets," she said. "I ask customers what they'd buy if they win."
"Normal lottery ticket sales are fairly steady," said Jerry Wallace, store manager at Everyday IGA, 701 1st Ave. N. "But when the Powerball or Mega Millions jackpot reaches $400 million, things go crazy, with people lined up to buy in the last few hours before a drawing."
The store brings in an extra clerk at such times just to handle lottery ticket sales. At other times, clerks walk a few feet from check stands to the service center to get lottery tickets, similar to when a customer orders cigarettes.
"It's part of their job and they're used to it," Wallace said.
"Do lottery sales pay for themselves? Probably not, but it's a service our customers expect, so we supply it," he said.
"We sell postage stamps as a convenience to customers and don't earn anything from that," Wallace added.
It can be fun for customers to buy lottery tickets, "so long as they keep their perspective and know the odds," he said, and fun for clerks, too.
"One of these days I hope to sell a winning Powerball or Mega Millions ticket," he added.
Schulte said her shoppers weren't thrilled with the recent doubling of the Powerball ticket price to $2.
The lottery's Iverson said the Powerball increase was voted on by 44 participating states and allow for faster growing, bigger jackpots.
"We offer so many games, that there's one for every budget and interest," he said, including the $1 Mega Millions lotto ticket similar to Powerball.
Lottery director Wong said her staff prides itself on creativity, integrity and customer service.
Besides continuing those on-going tasks, the Montana Lottery crew faces two major challenges, she said: "keeping up with the fast changing pace of technology and with the changing and aging demographic of customers."
She cited one of several recent technical improvements.
The lottery put in "win stations," its name for self-service lottery machines in many bigger Montana stores to ease buying.
Demographic changes provide two challenges, Wong said.
The lottery needs to continue providing games in a convenient way to a core group of older folks who have been buying tickets for up to 25 years, she said.
It also must find ways to reach and intrigue a younger generation of potential players, she said.
Rich history: 25 years of Montana Lottery highlights
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