Oct 22, 2014, 8:09 am
The Pennsylvania House has voted 195-1 to send to Gov. Tom Corbett a bill that Pennsylvania Lottery officials say will give them more flexibility in setting player odds and prizes, increasing sales in the long run.
But that flexibility is paired in the bill with a new requirement that the General Assembly have final approval over any Lottery plans to add new game categories like Keno or Internet-based games.
The latter clause, added by the state Senate earlier this fall, was a response to concerns that adding either type of new game would dramatically increase the number of daily Lottery drawings, and outlets for game play.
And that, Senate Majority Leader Dominic Pileggi said, was enough of an expansion in gambling that lawmakers should be involved.
The combination resulted in a bill nearly everyone could support, and that Corbett is expected to sign.
The bill lowers Pennsylvania's statutorily required profit margin from 27 percent of all Lottery sales at present, to 25 percent.
That may sound counter-productive, but Lottery Executive Director Sylvan Lutkewitte III has said lowering the profit margin lets them give players better odds of winning.
Better odds and more prizes for players, he contends, spark interest in the games and grow sales, ultimately resulting in more revenue for the Lottery and the senior services it supports.
In a brief interview after the House vote Monday, Lutkewitte said that with the bill's passage "we can start to plan on adjusting and increasing our payouts on our instant ticket portfolio really immediately."
But given the need to play through games that are already in circulation, Lutkewitte added, it could be several months till tickets with the sweeter odds are on the street.
The change in the profit margin alone, Revenue Secretary Dan Meuser added, should increase the lottery's return to the state by $7 million in fiscal 2015-16; $13 million in 2016-17; and $20 million annually by 2017-18.
With no action on the profit margin, the Lottery's profit floor was scheduled to rise to 30 percent next July, which Meuser said would have translated into major reductions in ticket sales and profits over the next five years.
Meuser said granting legislative approval over the addition of a Keno game was acceptable because the administration always wanted lawmakers' cooperation on that front.
As for Internet-based games, Meuser said administration attorneys have always had doubts that the Lottery could add that category without legislative approval.
Faced with demographic projections that indicate significant demand in growth for senior services, Corbett Administration officials have put a premium on trying to grow lottery profits.
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