Idaho Lottery revenue down after 11-year run of record profits

BOISE - Idaho’s state lottery presented a $45 million dividend check to the state Tuesday, down from last year’s $49 million, the first drop after 11 straight years of record dividends for the state’s schools and public buildings. Out of those profits, public schools will get $28 million - $11 million of that for the school district bond levy equalization fund, and $17 million that goes to the state Department of Education for new roofs and other needs at Idaho schools – and $17 million to the state’s Permanent Building Fund. “There’s no guarantees, there was no guarantees when we started the lottery,” said Gov. Butch Otter. But, he said, “There’s no reason for us not to anticipate good, healthy, substantial stability in it.” He added, “Would I like to see it continue to grow? Listen, I’m not going to put a gun to anybody’s head and make ‘em buy a lottery ticket, but that’s not what it’s all about. We can do marketing, we can do encouraging … in a responsible way. We don’t want people spending their lunch money on a lottery ticket. Everyone has their reasons why they buy a lottery ticket.” He noted that personally, he usually waits until the jackpot hits “around $200 million.” That goes to the heart of why the Idaho Lottery’s profits are down this year – two big national multi-state lottery games, Powerball and Mega Millions, have seen big drops in sales over the past year because of a long run of smaller jackpots, in the $40 million to $60 million range, rather than the attention-grabbing hundreds of millions. “It’s pretty much the same everywhere – everybody’s down 20 percent,” said Jeff Anderson, Idaho Lottery director. Yet, Idaho’s total lottery sales for the past year were actually up slightly, at $211 million, up 1 percent from last year’s $208.9 million. Anderson said due to Idaho’s mix of games, including the introduction of two new ones and various themes and marketing campaigns for its scratch tickets, the state was down $10 million from Powerball and Mega Millions, but still up 1 percent overall in sales. The biggest Powerball jackpot in fiscal year 2015 was $188 million; typically, jackpots average $130 million. But this spring saw a run of nearly two months without a jackpot over $60 million. “Our challenge is to responsibly grow the dividend without these big jackpot runs,” Anderson said. He’s not anticipating spending more on advertising; the Idaho Lottery’s advertising budget is capped at 3.5 percent of its proceeds, and it spends only about 1.8 percent. “What really drives sales is when the … jackpot’s really big,” Anderson said. “That’s what creates the interest for the infrequent player – that’s just what people do.” Powerball recently announced changes in its odds designed to address the lagging sales; they’ll go into effect in October. Anderson, who is currently president of the Multi-State Lottery Association, said those changes had to happen. The lag, he said, came because several large states, including California, joined Powerball since it last adjusted its matrix in 2010. With so many more players, combinations of numbers were hit more often, resulting in jackpots being hit more frequently – before they had a chance to build up to be really big. The changes will increase the odds of winning any prize, but decrease the odds of hitting the jackpot – which should have the effect of delaying the big-jackpot hits and allowing them more time to grow. Overall, the chances of winning any prize will improve from about 1 in 32 to 1 in 25. Powerball tickets doubled in price in 2012, from $1 to $2, in a move designed partly to promote bigger jackpots. The Idaho Lottery introduced two new games in the past year: “Lucky for Life,” a new multi-state draw game that has a top prize of $1,000 a day for life and debuted in January; and “Insta-Play,” a terminal-based scratch ticket that debuted in October. Both have been successes, Anderson said. Idaho had eight jackpot winners in the just-concluded fiscal year, including seven who won in Idaho-only games, Anderson said. “There were five new millionaires and 11 players who won more than a quarter-million dollars.” Mel Fisher, chairman of the Idaho Lottery Commission, said with the latest dividend, Idaho’s lottery has turned over nearly $695 million to Idaho schools and the building fund over its 26-year history. Otter said, “Every year, Idaho’s public schools and the state’s permanent building fund are the true winners of the Idaho Lottery.”