Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, March 18, 1991 TAG: 9103190404
SECTION: EDITORIAL PAGE: A-8 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Medium
To be sure, no legal strings were attached to the way lottery profits could be used. One idea was that they would be devoted to capital improvements. But when a $2.2 billion shortfall showed up in 1990-92 budget planning, lottery money became a cushion. Once the diversion to general-fund uses was made, legislators began angling for a bigger share of the profits: up from 35 percent for the state to 40 percent, the extra 5 to go to localities for schools and roads.
Some critics of this approach, such as Sen. Dudley Emick of Fincastle, said this would mean smaller prizes for lottery winners; players could feel betrayed and might buy fewer tickets. Ergo, less lottery income. Politicians need to keep their fingers on the public pulse. Where the lottery's concerned, it seems they need to be psychologists if not seers.
Unlike paying taxes, buying lottery chances is voluntary; the state has to find out what works and stick with that as long as it does. Virginia's lottery has done remarkably well in its short life. And periodic projections of the commonwealth's lottery take have proved more accurate than the number-crunchers' predictions of income from some state taxes.
That kind of predictability is reassuring. Less so are the long-range expectations. If the Virginia lottery's experience parallels that of other states, less cushy times are ahead.
"There are people who think lotteries are in a world by themselves, but they're not immune to the laws of the marketplace," says Saul F. Leonard. He is a gambling-industry consultant in Los Angeles who works with some of the 33 states that began adopting lotteries in the mid-1960s.
Novelty helps lotteries; typically they grow fast at first. But after a while, as customers continue losing money - which, of course, the vast majority do - some get bored. To regenerate interest, the lotteries have to offer more games or bigger prizes, or jazz up their advertising, or all of the above. The General Assembly wisely restricted the kind of ads the Virginia lottery can run, but those limits may be increasingly tested. There already is a widening variety of games. And as Emick's remarks indicate, there is concern lest the prizes not seem big enough.
The pot doesn't always keep expanding; and gambling is not, as some contend, recession-proof. New York's lottery sales are off by an estimated 8 percent since last summer. Sales in California were $2.47 billion in the year ended June 30, down from $2.62 billion. Sales in Iowa declined about 2 percent last year. Pennsylvania showed a decline, as did some other states that have had lotteries a number of years.
Jim Davey, director of the Oregon lottery, is also president of Lotto America, a game played in several smaller states. "We stress winning too much," he says. "We haven't done a good job in positioning it as entertainment."
In Virginia, eyes are on the prize both in the statehouse and in the convenience stores and groceries across the commonwealth. When the day comes - as it almost certainly will - that lottery profits begin leveling off, it may be a lot less fun for everybody.
by CNB