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Powerball helps Florida Lottery cover losses
Wednesday, January 06, 2010 posted 09:35 AM EST
TALLAHASSEE -- Since the multistate lottery game Powerball arrived in Florida a year ago, people have bought more than $430
million in tickets. But even that couldn't stop overall lottery revenue in 2009 from dropping 3 percent compared with the
year before.
Lottery sales, which are usually immune from recessions, have taken a hit during the downturn. Sales have plummeted nearly
$300 million since the lottery's high-water mark in 2008. It's the first significant drop since 1995.
But without the Powerball money, the decrease in sales certainly would have been worse.
``It's really allowed us to limit the decrease that I think we would have experienced had we not joined Powerball when we
did,'' said Leo DeBenigno, secretary of the Florida Lottery. ``It was really great timing, in retrospect.''
State officials usually talk about the lottery in terms of the money it provides to K-12 schools, colleges and scholarships.
The educational enhancement fund accounts for about 7 percent of the state's $19.8 billion education budget.
MODEST DROP
For the current fiscal year, state economists predict a relatively modest drop in lottery money for the education fund: $60
million from a $1.3 billion pot of money. To keep the payouts to education from falling as quickly as sales, lawmakers raided
a separate unclaimed property fund and also deeply cut into the lottery's reserves.
Rep. Alan Hays, whose legislative committee oversees the lottery's budget, said the drop in sales isn't necessarily a bad
thing.
``I would hope that those who are having decreases in income realize they don't have as much discretionary income to play
with,'' said Hays, R-Umatilla. ``Instead of putting their dollars into some gambling thing, they need to put their dollars
into their family needs.''
More than 30 states participate in Powerball, which offers mega-jackpots at odds of 1 in 195 million. The game has resulted
in 13 new millionaires in Florida. An Orlando dermatologist won the state's first jackpot, a $101 million lump-sum payment,
in October.
By joining Powerball, lottery officials anticipated some people would stop playing Lotto, the state's pick-six game. But
DeBenigno says there has been a net gain in revenue -- combined Powerball and Lotto sales eclipse Lotto sales from past years.
But the drop in Lotto sales -- roughly $275 million, or 36 percent -- can still raise eyebrows.
``People are shifting from Lotto in a greater amount than we thought,'' said Amy Baker, the state's top economist.
Baker and gambling experts say the overall sales figures are a function of the sputtering economy. Lottery tickets are similar
to other types of goods and services, says economics professor Doug Walker, who studies gambling at the College of Charleston.
``It's not surprising to me that there would be some decline in sales and revenues,'' he said.
But recessions didn't used to mean a drop in lottery funding. What's different this year? ``It's probably because this is
a more serious recession than we've seen in years past,'' Walker said.
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