Lottery mega-jackpots generating less 'buzz'
Posted: 1/27/2007 9:23:05 AM
Rhode Island Lottery chief predicts Powerball and Mega Millions will merge in the future
Just a few years ago, a $240 million Powerball jackpot would have drawn long lines at gas stations and convenience stores across the state.
But last week there was little buzz. And forget about lines.
Call it jackpot fatigue.
Rhode Islanders' appetite for gambling has lowered. And we're not alone. Elsewhere in the region, sales of lottery tickets and other forms of gambling are either less than last year or flat.
"No one is experiencing those [long] lines anymore," Gerald S. Aubin, the head of the Rhode Island Lottery, said yesterday. "I don't think it's a shortage of money. They're just not as excited about a $240 million jackpot as they were 10 years ago."
"In everyone's eyes it's not the event that it was," Aubin added.
"I think people are desensitized to those large numbers, much more than they were years ago."
Aubin said sales throughout the industry "have been hurting."
"Everybody is off," he said.
There is no clear reason for the slow sales. Aubin places the blame on the usual suspects: this summer and fall's high gas prices and a generally "sluggish economy." For the most part, he said, lottery sales are still driven by how much disposable income someone has.
"When somebody goes into a convenience store or gas station," Aubin said, "we're competing with the same stuff that's on that counter."
It appears that the Slim Jims, Twizzlers, and Tic Tacs are winning.
Since July, Rhode Island lottery sales have grown by less than three-tenths of a percent compared with the same period last year. Instant scratch tickets are down 2.5 percent, Keno is down less than half a percent, and Powerball is up just 1.9 percent.
Essentially, lottery ticket sales are flat.
The situation is worse with Rhode Island's 4,700 video-slot machines.
Aubin told a group of state lawmakers yesterday that video-slot revenues are down 5.4 percent compared with the same period last year. That creates a budget shortfall of $45 million. (The state recently revised its budget estimates to account for this lagging slot play.)
At Lincoln Park, revenues have been down in seven of the last eight months. Newport Grand has been down during 16 of the last 20 months.
Lincoln Park is nearing completion of a more than $200 million expansion that general manager Craig Sculos told lottery officials yesterday should open in late March or early April. Last month the track also extended its hours, pushing back its closing time from 1 a.m. to 2 a.m. The new hours and the expansion are aimed at increasing profits for the track — and the state — but some local officials fear the move signals a push for 24-hour gambling.
Newport Grand has its own expansion plans, which it showed lawmakers again yesterday, but has yet to break ground on the project and is fighting a zoning decision in court.
The situation in Massachusetts isn't much better. Lottery sales there are down 3.8 percent for the first five months of the fiscal year that started July 1.
Connecticut's two casinos are showing a mixed picture. Slot machine revenues at Foxwoods Resort Casino are down three-tenths of a percent since July. However, nearby Mohegan Sun is showing a 5.7 percent increase.
Granted, all of these changes could be nothing more than normal fluctuations.
In 2003, the Rhode Island Lottery — excluding video-slot machines — brought in $67.2 million for the state. The next year that fell to $63.6 million, then $61.8 million before climbing back up to $67.5 million last year.
There is always a group of people who will buy lottery tickets. For instance, some people play the same four numbers day after day on the daily lottery. Others will play only Powerball and only when there is a large enough jackpot. If there are more large Powerball jackpots in a given year, then more people are likely to play the lottery than normally would, driving up sales.
Aubin said those Powerball jackpots are primarily responsible for the major shifts in lottery revenues.
In August 2005, the Multi-State Lottery Association, which runs Powerball, decided to change the odds. Jackpots became harder to hit, which meant that larger and larger prizes are awarded when someone matches the winning numbers. So instead of having say eight jackpots of $200 million in a year, there might now be only five jackpots but each might be more than $300 million.
(The association includes Rhode Island, 28 other states, Washington, D.C., and the U.S. Virgin Islands.)
Aubin says the real driving force behind Powerball sales is media hype.
"That's when the lines start," he said. "That's when the frenzy starts."
But the media haven't been biting. Rhode Island did have a $1 million winner from Saturday's Powerball drawing. The winner, who bought the jackpot ticket at Lincoln Park, has yet to come forward.
"That would be, some years ago, a very major event in the media," Aubin said. This week, though, there has been minimal interest.
Sales start to skyrocket once Powerball makes front-page headlines.
"Then it becomes a situation where you want to belong," Aubin said.
"You want to take part; you want to participate in this whole discussion: if I win, what will I do?"
Aubin predicts that Powerball and Mega Millions, the other multi-state lottery game available in 12 states, including Massachusetts, will someday merge to create larger jackpots hoping to drive up sales. To that end, the United States might even participate in an international lottery.
So at risk of creating a media frenzy: the Powerball prize stands at $240 million — $114 million if the winner chooses the lump-sum payment option. The drawing is tomorrow night.
Source: Providence Journal
