Kentucky Lottery posts record $810.5M in sales
Kentucky Lottery reports record $810.5 million in sales for just-ended fiscal year
By Bruce Schreiner, Associated Press Writer
On Friday July 17, 2009, 4:01 pm EDT
Buzz up! 0 Print
LOUISVILLE, Ky. (AP) -- Kentucky's lottery defied the odds of a reeling economy, posting record sales amounting to its heftiest contribution ever to the state treasury, officials said Friday.
It was the fourth straight year that lottery sales -- an important revenue source for Kentucky higher education, especially scholarships -- set a state record. The strong sales came as the state dealt with a seasonally adjusted unemployment rate of 10.9 percent in June.
In the fiscal year ending June 30, Kentucky lottery sales totaled $810.5 million, beating the previous year's record level by $32.3 million, or 4.2 percent, lottery officials announced Friday.
The lottery transferred $204.4 million to the state for the full year, up from $192.1 million the previous year and barely ahead of the then-record amount contributed to the state earlier in the decade.
Scratch-off tickets ranging from $1 to $20 set the pace with a 7 percent sales increase to reach $504.1 million, said Kentucky Lottery Corp. President and Chief Executive Arch Gleason.
Gleason said the latest figures indicate that adults who play the lottery spend between $10 and $15 weekly on lottery tickets -- comparable to average amounts in recent years.
"Lottery sales historically have been a bit more resilient in economic downturns than the general economy," Gleason said in a phone interview.
The lottery's strength amid a recession indicates some people see the games of chance as "a way to cope," said John Vahaly, chairman of the University of Louisville's economics department.
"The increase in demand is just sort of coming from people's attempts to try to make a bad situation better," Vahaly said by phone.
Lottery sales of $810.5 million included $45.5 million in free tickets awarded as prizes for scratch-off games, lottery officials said. Actual cash sales totaled $765 million for the fiscal year, down slightly from $778 million in cash sales the previous year.
Free scratch-off tickets replaced the lowest-end prizes, which equaled the ticket's purchase price.
The lottery did away with those smallest cash prizes because it found players tended to ask for another ticket instead of the cash payout.
"From a profit standpoint, it basically washes out almost to zero," Gleason said.
Online game sales increased slightly to $292.2 million in the just-ended fiscal year, led by gains in the daily Pick 3 and Pick 4 games. Powerball sales fell 1.5 percent to $96.9 million.
Retailers also benefited from higher overall sales, receiving a record $50.2 million in commissions and incentives. The lottery's operating expenses for the year totaled $33.1 million, or 4.3 percent of sales.
The lottery's record contribution to the state treasury comes as lawmakers have struggled to keep the state budget balanced amid the sluggish economy.
The first $3 million of lottery proceeds to the state go to literacy programs.
Most state-directed lottery money goes to college scholarships and grants, both merit- and need-based. Lottery revenues also are used to fund the Kentucky Educational Excellence Scholarship program. KEES scholarships go to Kentucky high school students as a reward for good grades and test scores.
The remainder goes to the state General Fund to "support restoration of higher education funds."
Looking ahead, the lottery projects sales of $829 million in the year that started July 1, with projected contributions to the state of $211.5 million, Gleason said.
Lottery officials are seeing sales flatten, however, which could lead to more belt-tightening, he said.
Last year, the lottery trimmed its work force by 25 positions, a 13 percent cut, and closed a regional office as part of efforts to reduce expenses by about $4.5 million.
Gleason sought to reassure lottery staff Friday and said he wasn't looking to further reduce staffing "because I think we've already cut staff to the bare bones."
Also on Friday, the lottery's board gave Gleason a two-year-contract extension through 2014.
AI
