El Gordo struggling amid slim pickings New lottery game needs Santa to bring more players' dollars

December 12, 1992|By Scott Shane | Scott Shane,Staff Writer

Could el Gordo turn into el Floppo?

Ticket sales in the Maryland lottery's heavily advertised new game have dropped off sharply since el Gordo's debut Nov. 27, and at the current pace the month-long game could actually lose money for the state.

But lottery officials say they are confident a pre-Christmas rush will boost sales sharply and produce the hefty contribution they have promised to patch the ailing state budget.

certainly would have hoped to sell out faster," said Martin R. Goldman, the lottery's deputy director of marketing.

"But I'm not disappointed. And I still believe we're going to sell out."

El Gordo -- Spanish for "the fat one" and based on a game played in Spain since the 18th century -- is the 19-year-old lottery agency's latest attempt to lure new players.

The bait is a $10 million grand prize -- paid out over 20 years -- and smaller prizes ranging from $25 to $1 million.

The number of smaller prizes depends on how many tickets are sold.

Late yesterday -- the 15th day of the 30-day game -- roughly 900,000 of the total 5 million el Gordo tickets had been sold.

Should sales between now and the Dec. 26 drawing remain at the daily average so far, about 1.9 million of the $5 tickets would be sold, generating gross revenue of about $9.5 million.

That money would fall short of the state's expenses. The grand prize would cost the state about $5 million -- the price of an annuity that pays out $10 million over 20 years. The other prizes would cost about $4 million. Another $1 million is being spent on advertising the game.

That would mean a $500,00 loss, a far cry from the profit of $8 million to $10 million the state would net from the game were all 5 million tickets sold.

But Mr. Goldman insisted that experience with other games suggests that many el Gordo players will wait until closer to Christmas to make their purchases. The tickets are natural choices for last-minute gifts, he said.

In addition, the agency has planned another dose of advertising to coax the reluctant to go for the jackpot, he said.

Last year, the lottery sold a holiday package of Lotto tickets called "Lotto Pass" for $10 each during the month before Christmas.

More than one-third of total ticket sales occurred on the last two days, according to figures provided by the lottery agency.

Lottery officials are hoping for a repeat performance with el Gordo. But the total Lotto Pass sales were only about 35,000 -- a tiny fraction of the 5 million el Gordo tickets.

Terri La Fleur, senior editor of Gaming and Wagering Business, a gambling trade magazine, said Maryland officials' hopes of big last-minute sales are realistic, though she said no one can confidently predict a sell-out.

"When they're going to see the heaviest activity is in the last few days," Ms. La Fleur said. "People want to turn it into an instant game."

Ms. La Fleur, who has covered the lottery industry for 12 years, said many states have eyed the successful Spanish game for years and are now closely following Maryland's el Gordo.

"It's an exciting experiment for the industry," she said.

"If it works, every state's going to pick it up."

By far the biggest day for el Gordo was the first, which followed a two-week advertising blitz and saw 211,510 tickets sold.

The fast pace of that opening day produced euphoria at lottery headquarters, and Carroll H. Hynson Jr., the agency's deputy director for public affairs, predicted then that all 5 million tickets would be sold within two to three weeks.

But sales fell the second day to 144,038, and since then they have ranged from about 20,000 to 60,000 a day.

This week Mr. Hynson dismissed his earlier prediction as "a thought projection. This is uncharted territory for us."

He said he still believes that sales will pick up and the game will make substantial money, even if less than originally projected.

Gordo sales so far do not appear to be cutting into revenue from other lottery games, officials say. "We expected some cannibalization, but we're really not seeing any," Mr. Goldman said.

Lottery outlets report mixed experience with el Gordo tickets, which appear to be selling best in more affluent areas.

"It's not going too well, and it's getting weaker," said Howard Johnson, manager of a 7-Eleven on Reisterstown Road in Northwest Baltimore.

"Basically the cost is too high for people," he said.

"Our sales are holding up pretty well," said Alec Satisky, co-owner of the Hollinswood Shoe Center on West Patapsco Avenue in Southwest Baltimore.

"At $5, it appeals to a more affluent, white-collar clientele. I think it's attracting new players to the lottery."

If el Gordo does attract large numbers of wealthier players, the game could answer one of the most common criticisms of the lottery: that it amounts to a regressive tax on the poor, because less-well-off Marylanders play in disproportionate numbers.

"We want to try to spread the sales to non-traditional players, and we're succeeding," Mr. Goldman said.

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