Tennessee retailers reluctant to pay lottery prizes in cash

Apr 29, 2004, 7:30 am (6 comments)

Tennessee Lottery

Rebecca Paul, CEO of the Tennessee Education Lottery Corp., said she is concerned because retailers do not want to pay out lottery prizes in cash.

Retailers do not have to pay cash for prizes over $20, Lottery spokesperson Kym Gerlock said. The Lottery Corp. encourages them to pay prizes in cash but they can also pay by check or money order.

Paul is concerned paying by check or money order will discourage participation in the lottery.

"The statute gave our retailers 6.5 percent base [pay] with no cashing bonuses written into the laws. So we're having trouble getting retailers to pay [cash] prizes," Paul said in testimony to the Senate Finance Committee Tuesday. "Many of our corporate retailers have chosen to pay in checks or money orders as opposed to cash because there is no incentive for them to pay in cash."

Sen. Steve Cohen (D-Memphis), who questioned Paul after her budget presentation to the Senate Finance Committee Tuesday, asked whether Paul would like legislators to look at changing the retailer compensation in the statute.

"I think it's difficult once you've given retailers 6.5 percent to take it away from them. But I do have some concern about retailers not paying cash," Paul said. "The law requires them to pay prizes, but that's a very difficult thing to monitor and control."

She said she had no recommendation to improve the situation.

Cohen also questioned the Lottery Corp.'s revenue estimates for next fiscal year.

Paul said it is difficult to make projections after only three months and a week of sales.

"But we're confident that by the end of this fiscal year we will transfer over $100 million [to the scholarship fund], our projections are $105 million," she said. "And for next fiscal year we're estimating very conservatively $200 million in transfers."

She said the first semester of scholarships would be covered.

Cohen said he was disappointed by the projected figures for next year. Compared to South Carolina, he said, projections should be higher.

"South Carolina did about twice what you're projecting, so what's wrong with our game?" Cohen asked.

Paul said nothing is wrong with Tennessee's lottery games, but the Lottery Corp. did very conservative estimates because it is impossible to predict Powerball.

Comparing Tennessee Lottery's first three months with South Carolina's first three months, Tennessee had a better per capita income, Paul said.

State Comptroller John Morgan said the state's Funding Board felt the lottery estimates are conservative but reasonable.

City Paper

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nobie23's avatarnobie23

as a customer playing the TN lottery I would want my prize in cash unless it is a large amount I won. Whats the purpose of playing and you win and the retailer gives you a money order or check to collect your winings; then you have to waste the high price of gas to go cash a check.

they need to come up with a better solution and have local offices within each county that has cash to pay out

 

nobie23

CASH Only

As long as big winners can receive CASH instead of annuity.

whodeani's avatarwhodeani

Lottery retailers are given cash when tickets are bought. Lottery retailers then should give cash back when tickets are redeemed. Making payouts in cash is part of the "cost" of lottery retailers doing business. I am sure they have no problems cashing those commission checks they get from the state lottery every month or however often they get them.

vincejr's avatarvincejr

I think the problem needs to be turned around by the retailers....if a retailer is smart, they will advertise the fact that they pay all prizes in cash. Customers who want this will then cash tickets at that store. Granted, while TN doesn't pay a cashing bonus like other states, as any player knows, winning tickets paid in cash usually lead directly to extra sales, whether it be of lottery tickets or of a cup of coffee and a danish.

rdarmand
Quote: Originally posted by vincejr on April 29, 2004


I think the problem needs to be turned around by the retailers....if a retailer is smart, they will advertise the fact that they pay all prizes in cash. Customers who want this will then cash tickets at that store. Granted, while TN doesn't pay a cashing bonus like other states, as any player knows, winning tickets paid in cash usually lead directly to extra sales, whether it be of lottery tickets or of a cup of coffee and a danish.


Very good idea.
CASH Only

Me too.

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