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Lottery is bright spot in S.C. revenue

Apr 13, 2004, 5:10 am

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South Carolina Lottery

As a University of South Carolina student, Leah Sugarman is strapped for cash.

But the 23-year-old said she usually can find money to play the South Carolina Education Lottery about once a month.

"I also find a dollar or two to smoke cigarettes," she said. "I just scrounge up some change from the car or sofa. It's not a big deal."

Sugarman said she usually spends a dollar -- and no more than $5 -- on scratch-off tickets and the Powerball game when the jackpot gets high.

"It's just for fun. I really don't think I'm going to win the jackpot or anything," she said.

Sugarman is not alone.  South Carolinians continue to play the lottery -- giving the state its revenue bright spot.

Since the games began in 2002, the lottery has generated more than $500 million for scholarships and other education spending.

The lottery has funded more than 300,000 college scholarships and sent tens of millions of dollars to aid primary education, buy new school buses and support an endowment fund for the state's three research universities, said Ernie Passailaigue, the lottery's executive director.

John Oswald, who has worked as a clerk at the Tiger Express convenience store for three years, said he has a "steady clientele" buying tickets each day. "It seems to be just as steady as it's always been."

Customers play the scratch-off and numbers games and when the Powerball jackpot gets high, "it gets really ridiculous how many people buy," Oswald said.

Board of Economic Advisors Chairman John Rainey said the lottery has exceeded his expectations.

"It's going gangbusters. It is a bright spot," Rainey said. "Right now, they're knocking the lights out. The question is, how long will it last?"

Lottery funds typically are not stable, and Rainey said he expects to see revenues drop once the games have been around for awhile.

The BEA's original forecast for lottery funds to be deposited in a special education account this fiscal year was $172 million.

The lottery is some $20 million ahead of schedule, having transferred more than $190 million since the fiscal year began in July.

The BEA then raised the estimate for the year to $253 million.

Passailaigue said he expects the lottery to exceed even that revised estimate by at least $20 million.

"Lotteries usually do well in all economic times, and they usually do very well when they first start and there is some novelty," Dave Schwartz, an assistant professor at the University of Nevada Las Vegas and coordinator of the school's Gaming Studies Research Center, said in an e-mail.

When players get accustomed to the games, the lottery will "bring out new ones and devise new marketing techniques," Schwartz said.

Passailaigue said the lottery works to keep the games fresh for players. The lottery rotates three or four instant tickets a month out of the system, he said. On Tuesday, the lottery introduced a new ticket featuring paintings from artists around the state.

Meanwhile, lawmakers' reliance on lottery funds grows. The budget passed by the House last month uses lottery funds not just for scholarships but for K-12 programs, including libraries, South Carolina Educational Television and the Education Accountability Act.

"We've got a high bar, but we're going to do our best to achieve our goals," Passailaigue said.

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