Lottery escapes recession State's cut of lottery proceeds up $4.4 million.

July 16, 1991|By Frank D. Roylance | Frank D. Roylance,Evening Sun Staff

Despite the uncertainties of recession, Marylanders spent $813 million on lottery tickets in the fiscal year ended June 30, about the same amount they spent the year before, lottery officials said.

The state's cut of the action, meanwhile, grew by $4.4 million, but only because the legislature allowed the administration to take $5.5 million from the lottery's unclaimed prize pool -- money that normally is returned to players -- to help balance the budget.

Even so, lottery spin doctors today were proclaiming fiscal 1991 "The Year of the Winner," noting that players collected a record $409.6 million in prize money during the year, up three-tenths of 1 percent from last year.

"The national and regional economic recession has grossly affected all discretionary spending," said Maryland lottery spokesman Carroll H. Hynson Jr. "In spite of that, we've had a banner year. We're calling it the Year of the Winner because our players won more this year than in the past."

Gross sales and revenues from the games also were up, or at least comparable to last year's, Hynson said, and "we're quite pleased about this."

International Gaming and Wagering Business magazine has reported that state lotteries nationwide grew more slowly in the last fiscal year, up an average of 5 percent from the prior year. Six states saw sharp declines, including Pennsylvania, which posted a 7.5 percent sales drop.

Maryland's lottery sales in the year ending June 30 grew by $1.9 million, up a tiny one-quarter of 1 percent from the $811 million in sales it registered last year.

State revenues, including $24 million for the Stadium Authority, grew by $4.4 million, up 1.3 percent from the $335.3 million collected last year.

That revenue included the $5.5 million from the unclaimed prize pool. The transfer was authorized by lawmakers as a one-time exception to the state's lottery legislation, which requires that all unclaimed prizes be returned to players, usually in the form of special promotional games and prizes.

The State Lottery Agency's performance fell well short of the state's hopes for the year just ended.

The state Board of Revenue Estimates forecast last December that the games would generate almost $852 million in sales during fiscal 1991. The actual figure on June 30 totaled $813.3 million. That's a 4.5 percent shortfall in expected sales.

Official estimates of how much the state's General Fund could expect to collect from the lottery were lowered from $333.9 million in December to $323.9 million in February. The final figure was $315.6 million, a revenue shortfall of $8.3 million, or 2.6 percent below the February estimate.

Slipping sales were registered in the state's Pick 3, Lotto and Instant games, while the Pick 4 game saw significant gains.

Hynson said sales of the state's Pick 3 game, which accounts for nearly half the agency's sales, were down slightly, about $700,000 in fiscal 1991. They totaled $404.2 million, compared with $404.9 million last year.

Pick 3 sales totaled $421 million as recently as 1988.

The state's take from the Pick 3 game was hurt by several exceptionally large payouts on popular numbers during the year. The most recent was a $4.7 million payout on the number 222 on May 3, more than four times what the state took in on Pick 3 that day.

Instant game sales slid from $103.4 million last year to $102.5 million in fiscal 1991. The decline came despite a campaign by the agency to increase player interest by introducing 11 new games during the year, nearly double the number on agent's shelves in fiscal 1990.

The Board of Revenue Estimates said in December it expected $115 million in sales of the instant games.

Sales of the multimillion-dollar Lotto game totaled just $130.9 million in fiscal 1991, Hynson said. That was down from $153.0 million the year before, despite the addition of a Wednesday Lotto drawing in November.

Hynson said Lotto sales are "impossible to estimate" because it is a pari-mutuel game whose popularity rises and falls with the size of its jackpots, which grow only when no one beats the odds and wins.

"According to the odds, in six or seven weeks [without a winner], we could have a pot of $16 or $17 million," Hynson said. "Once it exceeds $6 million or $7 million, play increases."

In fiscal 1991, however, the jackpots rarely got that high, and never topped $11 million. "Based on the math and logic of it," Hynson said, "we should have been getting higher jackpots. But players continue to win."

The Lotto sales slump was partly offset by the $22 million in sales of the new weekly Winners Take All game, which debuted in May 1990.

But even when that is added to Lotto sales (including subscription sales), combined revenues from the two games still totaled less than $160 million. That compares with $165.5 million for the two games in fiscal 1990.

Sales of the two games combined remain about where Lotto sales alone were in 1988.

The one bright spot in the state's lottery picture was in the sales of Pick 4 tickets. They were up nearly $10 million, from $137.8 million last year to $147 million in the year just ended. That's a 6.7 percent jump in sales.

"Pick 4 seems to be becoming the game of choice, obviously because of the higher stakes," Hynson said. Pick 4 pays up to $5,000 for a $1 bet, compared with a top prize of $500 in the Pick 3 game.

It's also harder to win, of course -- one chance in 10,000 for Pick 4 compared to one chance in 1,000 for Pick 3.

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