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N.D. lottery profits outpacing estimates

Aug 10, 2004, 9:29 am

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North Dakota Lottery

North Dakota's lottery has already turned over $1.43 million to the state treasury, matching the profits the new gambling venture was expected to make over 15 months, its administrator says.

Players spent $5.84 million on lottery tickets since March 25 - when the Powerball game was launched in North Dakota - through June 30, said Chuck Keller, the lottery's director. The sum includes $122,758 in revenues from a second game, Hot Lotto, which began ticket sales June 25.

Keller said the three-month figure is more than half the $11 million in sales that were anticipated during North Dakota's two-year budget period, which ends June 30, 2005.

"Our sales have exceeded our wildest expectations," Keller said.

Aside from the $1.43 million that has been transferred to North Dakota's general fund, another $139,511 has been funneled to a separate fund to finance counseling for compulsive gamblers.

The Legislature earmarked a portion of lottery revenues for gambling treatment, with the two-year total capped at $400,000. Keller said the limit should be reached by year's end.

Attorney General Wayne Stenehjem, who oversees the lottery, said demand for Powerball tickets has been greater than anyone believed possible.

"We're really surprised that this has caught on like it has," Stenehjem said. "People are excited about it. They enjoy playing it. And I think that's good news for the revenue stream of North Dakota."

Even at its current pace, lottery earnings represent a tiny sliver of the money deposited in North Dakota's general fund, which finances an array of programs, from medical assistance to aid for local schools and colleges.

When the Legislature crafted North Dakota's current 2003-05 budget, it assumed the state would collect $1.65 billion in general fund revenues during that period, including $674.8 million in sales taxes and $435.2 million in individual income taxes.

A third lottery game, Wild Card 2, is scheduled for its North Dakota debut Sept. 23, and a fourth will be rolled out early next year, Keller said.

Powerball is offered in 27 states, including North Dakota, South Dakota, Minnesota and Montana. The game has drawings each week, on Wednesday and Saturday nights. The odds for winning the Powerball jackpot, now estimated at $84 million, is more than 120 million to one.

From March 25 through June 30, North Dakotans spent 63.7 cents per capita each week on Powerball alone, which was more than double Powerball's weekly per-capita sales in South Dakota and Montana, Keller said.

The slice of each lottery dollar that goes to the general fund could be as high as 25 cents on the dollar, because of lower administration costs, Keller said. When the lottery began, he estimated 21 cents of each dollar would go to the general fund.

For each dollar spent on a lottery ticket, 50 cents is earmarked for prize payments. Scientific Games International Inc. of Alpharetta, Ga., which supplies North Dakota's lottery ticket terminals, gets a 10.63 percent commission, and North Dakota retailers who sell tickets get 5 cents for every $1 ticket sold.

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