S.C. Lottery may learn lessons from Georgia
Posted: 5/10/2005 12:24:00 PM
As North Carolina inches closer to starting a lottery, Georgia lottery officials may be enjoying a sense of irony, as South Carolina is now undergoing the same uncomfortable feeling that they created for the Georgia Lottery when they started the S.C. Education Lottery in 2002.
At the time, South Carolina politicians estimated that a Palmetto State lottery would siphon away up to $112 million from Georgia's lottery.
But those predictions never came to pass.
Instead, Georgia has enjoyed a string of record-setting years since South Carolina began selling lottery tickets in 2002.
Now South Carolina faces the possibility of losing up to $150 million a year in lottery sales if North Carolina starts competing for the money of Carolinas lottery players.
What's South Carolina to do?
It could look to what Georgia did to fend off the S.C. lottery.
Advertise more. And offer more games.
Even then, S.C. lottery director Ernie Passailaigue says, the threat to South Carolina's lottery from North Carolina games would be more dire than what Georgia faced when the Palmetto State started its lottery.
"What has Georgia got on its border (with South Carolina)? North Augusta," Passailaigue said. "I've got Charlotte-Mecklenburg (on the S.C.-N.C. border), which is like another state in itself."
More Ads, Games
Georgia officials won't say what their strategy was in fending off the threat South Carolina's lottery posed.
Spokeswoman Tandi Reddick said the Georgia Lottery's goal was to "simply try and provide fun and entertaining games." Reddick said she did not know how many players Georgia may have lost to South Carolina.
But Passailaigue says it's no secret how Georgia staved off South Carolina — by using its $20 million advertising budget, which is almost three times as large as the amount the S.C. lottery spends on ads.
Advertising is crucial, lottery officials say. They estimate every $1 spent on advertising could translate into as much as $140 in sales.
"They're very aggressive with advertising, and their main goal is to increase revenue; ours isn't," Passailaigue said of the Georgia lottery.
S.C. law restricts how much the Palmetto State lottery can spend on ads. Advertising is limited to 1 percent of income, or $7.7 million last year. State law also limits how the S.C. games can be marketed.
Georgia places fewer restrictions on how its games can be marketed and the types of games it can offer. For instance, Georgia sells keno tickets, a game similar to bingo.
In 2002, the year South Carolina began selling tickets, Georgia also joined eight other states and became part of the Mega Millions drawing. Just like the multi-state Powerball drawing that South Carolina belongs to, Mega Millions' large jackpots attract more lottery players.
Georgia's sales have increased steadily since its lottery was started in 1993. Sales have dipped in only one year — 2001, when they dropped about $120 million.
Georgia's steadily increasing lottery sales are unusual. State lotteries generally hit a sales plateau after a few years of operation. But, in February, Georgia Lottery officials said they expect another record year in 2005.
In 2004, the Georgia lottery generated about $2.7 billion in income compared with South Carolina's $953 million.
'Huge Sucking Sound'
Another reason Georgia has not suffered from the creation of the S.C. lottery is that some Palmetto State residents play the numbers in both states.
Greg's Gas Plus on West Martintown Road in North Augusta draws players from Georgia and South Carolina. Some players there say they prefer the Georgia Lottery for reasons both real and perceived.
Jack Leverett Jr., a cashier at Gas Plus, said players like that Georgia has more centers to claim prizes. Georgia also prints multiple lottery picks on separate tickets rather than on one ticket, as South Carolina does.
Some players interviewed at the Gas Plus also believe the odds of winning the Georgia Lottery are better than winning the South Carolina lottery, although none had proof. (The odds vary according to the game.)
S.C. officials say they won't know exactly how to respond to a North Carolina lottery until one is approved. The North Carolina Legislature is still trying to hammer out a compromise that would bring a lottery to that state.
For South Carolina, the worst-case scenario is legislation that opens North Carolina to different games and imposes few advertising restrictions.
"If they get video lottery and keno, you're going to hear a huge sucking sound from this state," Passailaigue said.
Source: Lottery Post Staff and The State
