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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