'A delicate balance'
In the fiscal year ended June 30, the Georgia lottery gave 25.3% of revenue, or $846.1 million, to education. The percentage of proceeds awarded isn't as important as the dollar amount, which has been growing, said Tandi Reddick, the game's media-relations manager in Atlanta. In 1997, the lottery gave 35% of revenue, or $581 million, she said in an email.
The Georgia lottery had record sales in the week ended Feb. 11, taking in $101.2 million and surpassing a 2007 record by more than $5 million, said Reddick, who declined to predict education funding levels for this year or the future.
"There is a delicate balance that must be achieved between prizes paid and profits returned," Reddick said. "If we believed for a moment that the lottery could increase the annual dollar amount returned to education by reducing prize payouts, thereby increasing the percentage return to the HOPE scholarship and pre-K programs, we would not hesitate to do it."
Budget holes
Some 29 states expect budget deficits of $47 billion for the fiscal year that begins July 1, according to the Center on Budget and Policy Priorities, a Washington-based nonprofit group that researches issues affecting lower-income Americans.
The drive to collect more from numbers games paid off in the year ended June 30, 2011, with 26 states reporting higher revenue than the year before, according to La Fleur's, a lottery research firm in Rockville, Md. Total sales increased by 3% to $56 billion.
The National Gambling Impact Study Commission, in a 1999 report, found that lotteries were the most widespread form of gambling in the United States -- and the type with the longest odds.
Unlike Georgia, with its dedicated stream to education, Massachusetts returns 95% of lottery revenue to its municipalities to do with as they wish: $802.2 million for the fiscal year that ended June 30, 2011. The rest goes to gambling-addiction programs, cultural groups and community services, said Paul Sternburg, the executive director of that state's lottery.
"We paid over $3.1 billion in prizes last year, so there are a lot of winners out there," Sternburg said in a telephone interview. "Massachusetts has always had the highest payout. I don't think we can go any higher. If we went any higher, we'd be hurting our net profits."
Competition from casinos
In January 2011, Massachusetts lottery officials examined the "portfolio mix," particularly the instant scratch-off tickets priced at $1, $2, $5, $10 and $20, Sternburg said from his office in Braintree, Mass.
"Our tickets -- they weren't popping out," he said. "We went back to basics: Make the tickets more attractive. You can see, when our first tickets went on sale in April, it's been going up ever since."
Gov. Deval Patrick of Massachusetts signed a law last year allowing casino resorts. Sternburg said they'll be open in two to three years and will take a chunk of lottery cash, at least temporarily.
"At that point we're expecting between a 3% and 10% hit in revenue," Sternburg said. "You have to change your portfolio, come up with new products."
A study commissioned by the Georgia lottery last year found that three casinos, if approved, could draw about $1 billion in revenue. With no casinos operating now, the lottery's focus is on "fresh and exciting" games for players and the possibility of a national game, Reddick said.
"The biggest challenge facing the Georgia lottery is finding ways to grow a mature lottery," Reddick said.
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