Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, June 28, 1990 TAG: 9006280777
SECTION: VIRGINIA PAGE: B1 EDITION: EVENING
SOURCE: BILL BYRD LANDMARK NEWS SERVICE
DATELINE: RICHMOND LENGTH: Medium
Lottery sales for budget year 1990, which ends Saturday, will top Thorson $460 million, agency officials said Wednesday. Although the figure is well above the $409 million the lottery snared during fiscal 1989, in which the games ran for just nine months, it is well below initial sales projections of $558 million.
"I felt like all this year we were apologizing that the revenue was not what we thought it would be," said Lottery Director Kenneth Thorson. He scrapped what he termed the overly optimistic projections earlier this year; public interest in state lotteries often tends to lag during the game's second year, he said.
On Wednesday, however, Thorson offered a rosier assessment of the lottery's financial outlook in fiscal 1991.
Sales, he predicted, would grow by more than one-fifth, to $560 million, during the next budget year, bringing the state $176 million in profits. Surging sales in the daily numbers game and more interest in the weekly Lotto drawings should give revenue a healthy boost, according to department predictions.
"I feel confident we'll make them, but there's always a certain amount of uncertainty," Thorson said at the monthly meeting of the State Lottery Board.
At least one board member, however, was skeptical. "My only concern is the state of the economy and its impact," said Harris Miller, appointed to the board by Gov. Douglas Wilder earlier this year. "The economic slowdown is clearly occurring across the board, and I'm just concerned that we not be too ambitious. Lottery tickets are a discretionary purchase."
Thorson said data from other states show that sales actually go up during hard economic times. "People cancel buying the televisions, the automobiles, the appliances," he said. "They tend to spend more on lottery tickets."
Despite the games' failure to meet the original sales projections, Thorson and other agency officials said they are pleased with the lottery's performance. Reports released Wednesday showed that the nightly, low-payout Pick 3 drawing continues to build a strong following, while sales in the multimillion-dollar Lotto game lag.
As of Tuesday, $168.2 million in Pick 3 tickets had been sold during fiscal 1990; gamblers had bet $52.2 million on the Lotto drawings, which began in late January. The daily Pick 3 contest, which offers a top prize of $500, started in May 1989.
Scratch-off "instant winner" tickets have been the lottery's biggest revenue source during the current budget year, but the reports showed public interest in those low-payout games is waning. As of Tuesday, slightly more than $237 million in instant games had been sold during this fiscal year; in fiscal 1989, gambling-starved Virginians handed over nearly $393 million for the scratch-off tickets. A top prize of $3,000 is offered in the lottery's newest instant game.
Pick 3, in fact, is on the verge of overtaking the instant games as the favorite of Virginia gamblers. In May, the daily number and the instant games finished in a virtual dead heat: $19.6 million in sales for Pick 3, $19.4 million for the instant games. Lotto trailed with $10.9 million in sales, even though the jackpot rose to a record $8.6 million late in the month. A Richmond restaurant owner and his family held the winning ticket.
Lottery officials have repeatedly said they are not surprised by the daily number's strength. Numbers games have a strong following in many Eastern states and are the leading revenue sources for several nearby state gambling operations, such as the Maryland lottery. In a report released Wednesday, the department forecast $200 million in daily numbers game sales for budget year 1991; scratch-off sales are expected to decline even more, to $180 million.
Although initial sales have disappointed some observers, lottery officials also expect healthy growth in the Lotto game during the next year. The department projects $180 million in sales.
Some critics, including Miller and former board member H. Stuart Knight, have suggested that Lotto sales may be slow because the state has not promoted the game enough. The agency's advertising budget was slashed last winter when Thorson imposed budget cuts to bring down operating expenses.
Lottery officials confirmed Wednesday that they plan to boost the advertising budget during fiscal 1991. The agency will spend $19.3 million on promotion during the next 12 months, and may commit $2.1 million more if needed, agency finance director Ray Patterson told the board. The lottery spent just $16.3 million on advertising and promotion in budget year 1990, Patterson said.
by CNB