The Kentucky Lottery Corp. expects its sales this fiscal year, which ends June 30, to hit a record $723.8 million meaning an extra $11 million for the state.
That sales total would be about 8 percent higher than the previous peak, $673.5 million, which was set last year. And this year, state government's share will be a record $192 million, up from last year's previous record $180.7 million, officials estimated. The state uses most of the money for college grants and scholarships.
But there was bad news, too: The new Tennessee lottery and, to a lesser extent, the higher cost of gasoline will cut into both ticket purchases and the state dividend in the fiscal year starting July 1.
"Overall this past year, we exceeded our expectations," lottery President Arch Gleason said in an interview yesterday. "But it will be tough to maintain the increases we have had in the last few years."
Gleason said "the wild card out there" is the cost of gasoline. Although it is difficult to measure the impact of the price of fuel on sales, Gleason said about 60 percent of all lottery tickets are purchased at service stations or at convenience stores that have fuel pumps.
The sales figures and projections were contained in the 2003-04 budget adopted by the lottery corporation's board at a meeting in Louisville Wednesday.
Eleven months ago, when the current fiscal year was beginning, lottery officials projected 2003-04 statewide ticket sales of $638.8 million. The sales should end up just shy of $725 million, the lottery staff told the board Wednesday.
Lottery officials estimate that Tennesseans usually purchased 10 to 12 percent of all tickets sold in Kentucky. But since the Tennessee lottery started in January, Kentucky Lottery sales at outlets near the Tennessee line have fallen considerably. Some of those merchants had previously always been among the top 10 lottery retailers statewide.
In some Kentucky border counties, Powerball sales dropped as much as 70 percent during a $212 million jackpot run last month, compared with the last big Powerball-jackpot frenzy, officials said.
Kentucky Lottery sales along the southern border will continue to erode as Tennessee gradually adds more lottery games, Gleason said.
The Kentucky Lottery's new budget projects that sales will total $665.8 million next fiscal year, or a drop of nearly $60 million from the estimated final figure for this year. Lottery officials attributed nearly all that decrease to competition from Tennessee.
Several positive factors helped to offset the influence of the Tennessee lottery in recent months and pushed the 2003-04 lottery numbers toward expected records.
There were three huge Powerball jackpots this fiscal year $260 million, $212 million and $210 million. As a result, $134 million worth of Powerball tickets were sold in Kentucky this fiscal year, about $35 million more than projected a year ago, officials said.
The predicted year-end record sales were also boosted by unprecedented sales of scratch-off tickets $356 million this fiscal year versus $320 million a year ago.
The primary reason was brisk business for $10 and $20 scratch-off games that pay out up to 78 percent of sales proceeds as prize money, said Larry Newby, the Kentucky Lottery's research director.
Lottery officials said they expect statewide sales to level off over the next few years.
There is no good way to raise sales significantly without introducing a major new product, such as casino-style keno or video lottery games, Gleason said.
And, he said, the state administration and legislature "have made it clear that they prefer that we not offer or pursue" such additional ways to gamble.
Doesn't look like Kentucky will switch from Lotto South to Hot Lotto.