The Minnesota Lottery will lay off 34 employees, nearly one-fifth of its workforce of 191, next month to meet state-imposed budget cuts. But the state-run gambling operation still projects a near-record year for sales because of changes in its popular multimillion-dollar Powerball game.
Most of the job cuts will come from the lottery's marketing staff, including 16 positions in field offices in Eagan, Brainerd, Detroit Lakes, Marshall, Owatonna and Virginia, assistant director Geno Fragnito said Friday. The rest will come from the headquarters in Roseville.
Workers received notices this week that their jobs will be eliminated Oct. 3.
The layoffs are expected to save $760,000 this fiscal year and $2 million in fiscal 2005, Fragnito said. The lottery must cut its annual spending to $43 million, from $46.6 million in fiscal 2003, which ended June 30.
"Staff reductions were the last thing we did," he said. "We don't know how the overall workload's going to be shifted. But hopefully, the public's not going to see any change."
In all, more than $7 million in cuts was needed to meet the spending cap in a year when lottery sales are projected to approach the record of $392.2 million set in 2000, Fragnito said. The cuts include:
" $4 million from rebidding the contract for the lottery's online network linking its 3,000 retailers statewide.
" $1.4 million from dropping promotions and sponsorships with the Minnesota Twins, Vikings, Timberwolves and Wild and the University of Minnesota sports teams.
" $625,000 in production savings from switching the drawings for the Gopher 5 and Daily 3 games from live in-studio telecasts to computer animations.
" $500,000 in reduced advertising, from $7.5 million last year to $7 million.
Last spring, the Minnesota Center for Environmental Advocacy said the lottery was spending too much on its operations and shortchanging the state by up to $25 million a year compared with other state lotteries.
Legislators responded by imposing the $43 million cap.
The lottery's sales for fiscal 2003 totaled $351.8 million, Fragnito said. Of that, $205 million was paid out in prizes, $79.4 million went to state environmental, compulsive gambling and general funds, and retailers collected $22.2 million in commissions and incentives, he said.
After several years of decline, lottery sales are surging again because of longer odds and bigger jackpots in the multistate Powerball game, Fragnito said.
I think MN should push for a longer-jackpot-odds Hot Lotto, to encourage more MUSL members to join.