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Tenn. legislators float idea that lower prizes will bring in more money

Tennessee LotteryTennessee Lottery: Tenn. legislators float idea that lower prizes will bring in more money
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Task force says 'bad idea'

NASHVILLE, Tenn. — Some Tennessee legislators are eying a reduction in prize payouts for Tennessee lottery players while letting them buy tickets with debit or credit cards.

The proposals are among ideas that are being floated as a way to generate more money that can be used for college scholarships.

Both were criticized at a meeting last week of the Senate Lottery Stabilization Task Force with a lottery official suggesting that a cut in prizes could be a bad business decision and the leader of a conservative group questioning the moral propriety of enticing more people to lose more money on the lottery.

According to Tennessee Education Lottery Corp. figures, 26.5 percent of net lottery proceeds generated last year went toward scholarships while 58.6 percent went into prize payouts to lottery game winners. Another 6.5 percent went to the vendors who sell the tickets and the rest to other operational expenses.

The 26.5 percent translated into $281.8 million for college scholarships and another $11.6 million for after-school programs at the K-12 level. Prize payouts totaled $695.1 million.

Prize payouts actually vary depending on the type of game. For "instant play" or scratch-off tickets, the payout is 66.6 cents per dollar versus 50.2 for online or computerized drawing games.

Some task force members said that reducing the prizes could make more money available for scholarships. Even an incremental adjustment downward in the money paid in prizes — for example, a quarter or half percentage point — would translate into millions more dollars available for scholarships, said Claude Pressnell, president of the Tennessee Independent Colleges and Universities Association.

But Andy Davis, chief financial and information systems officer for the lottery, said that may not be such a good idea for generating more money.

Kentucky tried such an approach in 2008, Davis said, with legislators mandating a downward adjustment in prize payouts. The result was fewer lottery players and a net decline in revenue, meaning about $2 million less was available for education than before the adjustment, he said.

Buying a lottery ticket — especially the "instant play" tickets that make up the bulk of sales — is basically an entertainment for the buyer, he said, and entertainment requires an ability to win reasonably often.

"We are selling a winning experience," said Davis. "If they (players) are not having a winning experience, they will, over a period of time, stop playing."

"I don't think that's correct," said Sen. Randy McNally, R-Oak Ridge.

McNally said he doubted that the typical lottery ticket purchaser would worry about the percentage prize payout when stopping by a convenience store "for a six pack of beer and a carton of cigarettes."

Current law also requires that all lottery tickets be purchased with cash. Several legislators have proposed at least changing that to permit use of debit cards as a means of increasing ticket sales and driving up revenue. Davis said 33 of the 44 states with a lottery now allow debit card purchases and 12 also allow credit card use.

He said that the "Y generation," ages 18-35, is more oriented toward debit cards than other age groups, and legalization of debit cards could enhance "impulse buying" by such people.

Sen. Bo Watson, R-Hixson, said debit cards would provide "a more successful pipeline" for marketing to younger people.

Rep. Harry Brooks, R-Knoxville, filed a bill earlier this year to authorize debit card use — later withdrawn — and Senate Democratic Leader Jim Kyle of Memphis has urged the change.

Bobbie Patray, president of the Tennessee Eagle Forum, said the "pressure for revenue is relentless," but legislators should not let that lead to another step toward enticing people into gambling — especially the poor who are already in debt — in the false hope of making money.

McNally observed that holders of a debit or credit card can already go to an ATM and get cash to buy lottery tickets. Patray said there is still a disconnect between a plastic card and cash for many that helps discourage gambling by those who can least afford it.

Kyle, who is not a member of the task force appointed by Republican Senate Speaker Ron Ramsey, says that debit cards are not used by poor people as much as people with higher incomes. So long as debit cards are the equivalent of cash, coming directly from a person's bank account, Kyle said they do not let people borrow money to gamble — a notion he opposes.

Davis outlined lottery revenue enhancement moves in other states that he said could be applied in Tennessee, including installment of "video lottery" games and Internet gambling.

Eight states have "video lottery," which Davis likened to slot machines. The most recent state to adopt the practice, Maryland, saw a quick $66 million increase in revenue, he said.

Only three states have Internet gambling, Davis said, and they limit players to state residents to avoid federal restrictions on interstate gambling. Nonetheless, he said the legality of the practice has raised legal questions.

Knoxville News Sentinel

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22 comments. Last comment 3 years ago by rdgrnr.
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dpoly1's avatar - driver
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Posted: October 31, 2011, 7:54 pm - IP Logged

Kinda like raising taxes to stimulate the economy .................. epic fail !!!!!  Bash

    rdgrnr's avatar - walt
    -Ridge Runner- Oracle of the Appalachians
    Way back up in them dadgum hills, son!
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    Posted: October 31, 2011, 8:07 pm - IP Logged

    Leave it to Tennessee to suggest solving the problem by screwing the players just a little bit more. RINO Senator McNally said we wouldn't even worry about less prizes when we stop for our "beer and cigarettes". What a jerk.

    What they should be considering is new leadership in the lottery department, not figuring ways to screw the players. Get some decent games, increase the prizes, have bigger jackpots, run jackpot games everyday instead of three times a week, fire everybody you have and get people who care about what the players think and what the players want, get investigators to catch and prosecute cheating clerks, hire people to man the phones who can at least act like they give a sh*t about players' concerns.

    And the Number One thing they should do? Get rid of the frigging computers and get mechanical ball machines back again.

    But they won't do any of this. Why? Because they couldn't care less what the players have to say about anything.


                                                 
                         
                                             

     

     

     

     

                                                                                                       

    "The only thing necessary for evil to triumph is for good men to do nothing"

                                                                                                --Edmund Burke

     

     

      Avatar
      Kentucky
      United States
      Member #32652
      February 14, 2006
      5267 Posts
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      Posted: October 31, 2011, 8:09 pm - IP Logged

      Kinda like raising taxes to stimulate the economy .................. epic fail !!!!!  Bash

      Not much we can do when they raise our taxes, but when they lower prize payouts, we don't have to play. The only good idea I see is allowing players to buy tickets with credit or debit cards.

      They can use them to buy alcohol, red bull, and cigarettes buy heaven forbid if they use them to buy a lottery ticket!

        weshar75's avatar - Lottery-042.jpg
        Mcminnville, Oregon
        United States
        Member #3013
        December 13, 2003
        2306 Posts
        Offline
        Posted: October 31, 2011, 8:27 pm - IP Logged

        I think that lotto should be cash only that is a slippery slope when you let credit cards and debit cards too.  People could charge all day long and run up big bills with that.  So cash only for me.-weshar75

          MADDOG10's avatar - smoke
          North Jersey
          United States
          Member #5709
          July 18, 2004
          17538 Posts
          Online
          Posted: October 31, 2011, 8:38 pm - IP Logged

          Task force says 'bad idea'

          Some Tennessee legislators are eying a reduction in prize payouts for Tennessee lottery players while letting them buy tickets with debit or credit cards.

          The proposals are among ideas that are being floated as a way to generate more money that can be used for college scholarships.

          Both were criticized at a meeting last week of the Senate Lottery Stabilization Task Force with a lottery official suggesting that a cut in prizes could be a bad business decision and the leader of a conservative group questioning the moral propriety of enticing more people to lose more money on the lottery.

          According to Tennessee Education Lottery Corp. figures, 26.5 percent of net lottery proceeds generated last year went toward scholarships while 58.6 percent went into prize payouts to lottery game winners. Another 6.5 percent went to the vendors who sell the tickets and the rest to other operational expenses.

          The 26.5 percent translated into $281.8 million for college scholarships and another $11.6 million for after-school programs at the K-12 level. Prize payouts totaled $695.1 million.

          Prize payouts actually vary depending on the type of game. For "instant play" or scratch-off tickets, the payout is 66.6 cents per dollar versus 50.2 for online or computerized drawing games.

          Some task force members said that reducing the prizes could make more money available for scholarships. Even an incremental adjustment downward in the money paid in prizes — for example, a quarter or half percentage point — would translate into millions more dollars available for scholarships, said Claude Pressnell, president of the Tennessee Independent Colleges and Universities Association.

          But Andy Davis, chief financial and information systems officer for the lottery, said that may not be such a good idea for generating more money.

          Kentucky tried such an approach in 2008, Davis said, with legislators mandating a downward adjustment in prize payouts. The result was fewer lottery players and a net decline in revenue, meaning about $2 million less was available for education than before the adjustment, he said.

          Buying a lottery ticket — especially the "instant play" tickets that make up the bulk of sales — is basically an entertainment for the buyer, he said, and entertainment requires an ability to win reasonably often.

          "We are selling a winning experience," said Davis. "If they (players) are not having a winning experience, they will, over a period of time, stop playing."

          "I don't think that's correct," said Sen. Randy McNally, R-Oak Ridge.

          McNally said he doubted that the typical lottery ticket purchaser would worry about the percentage prize payout when stopping by a convenience store "for a six pack of beer and a carton of cigarettes."

          Current law also requires that all lottery tickets be purchased with cash. Several legislators have proposed at least changing that to permit use of debit cards as a means of increasing ticket sales and driving up revenue. Davis said 33 of the 44 states with a lottery now allow debit card purchases and 12 also allow credit card use.

          He said that the "Y generation," ages 18-35, is more oriented toward debit cards than other age groups, and legalization of debit cards could enhance "impulse buying" by such people.

          Sen. Bo Watson, R-Hixson, said debit cards would provide "a more successful pipeline" for marketing to younger people.

          Rep. Harry Brooks, R-Knoxville, filed a bill earlier this year to authorize debit card use — later withdrawn — and Senate Democratic Leader Jim Kyle of Memphis has urged the change.

          Bobbie Patray, president of the Tennessee Eagle Forum, said the "pressure for revenue is relentless," but legislators should not let that lead to another step toward enticing people into gambling — especially the poor who are already in debt — in the false hope of making money.

          McNally observed that holders of a debit or credit card can already go to an ATM and get cash to buy lottery tickets. Patray said there is still a disconnect between a plastic card and cash for many that helps discourage gambling by those who can least afford it.

          Kyle, who is not a member of the task force appointed by Republican Senate Speaker Ron Ramsey, says that debit cards are not used by poor people as much as people with higher incomes. So long as debit cards are the equivalent of cash, coming directly from a person's bank account, Kyle said they do not let people borrow money to gamble — a notion he opposes.

          Davis outlined lottery revenue enhancement moves in other states that he said could be applied in Tennessee, including installment of "video lottery" games and Internet gambling.

          Eight states have "video lottery," which Davis likened to slot machines. The most recent state to adopt the practice, Maryland, saw a quick $66 million increase in revenue, he said.

          Only three states have Internet gambling, Davis said, and they limit players to state residents to avoid federal restrictions on interstate gambling. Nonetheless, he said the legality of the practice has raised legal questions.

          How about we float the idea of getting rid of those Legislators who proposed this to begin with and this way we'll be able to generate some money fot the scholarships, then you can really generate some cash by getting rid of the "Dragon Lady" and her salary and generate some more.

          What say you Ridgerunner??

                                                                    Your Best Teacher, is Your Last Mistake.

            rdgrnr's avatar - walt
            -Ridge Runner- Oracle of the Appalachians
            Way back up in them dadgum hills, son!
            United States
            Member #73904
            April 28, 2009
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            Posted: October 31, 2011, 9:17 pm - IP Logged

            How about we float the idea of getting rid of those Legislators who proposed this to begin with and this way we'll be able to generate some money fot the scholarships, then you can really generate some cash by getting rid of the "Dragon Lady" and her salary and generate some more.

            What say you Ridgerunner??

            Roger that, Dog.

            And you know how governments and businesses always hire consultants? Well they couldn't find better lottery consultants anywhere than we have right here.

            But we have a bunch of rich, fatcat politicians who probably never play or even think about the lottery, whose heads are so far up their rearends they won't take advantage of it.

            If they want to know what lottery players will buy more of, why not just ask us? We're right here for free at Lottery Post. We're a concentration of nothing but lottery players, a lottery focus group, a lottery think-tank, and we won't charge them one red cent.

            But watch em go hire a consultant now for a million dollars.

            Bastages.


                                                         
                                 
                                                     

             

             

             

             

                                                                                                               

            "The only thing necessary for evil to triumph is for good men to do nothing"

                                                                                                        --Edmund Burke

             

             

              Todd's avatar - Cylon 2.gif
              Chief Bottle Washer
              New Jersey
              United States
              Member #1
              May 31, 2000
              21432 Posts
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              Posted: October 31, 2011, 9:38 pm - IP Logged

              Roger that, Dog.

              And you know how governments and businesses always hire consultants? Well they couldn't find better lottery consultants anywhere than we have right here.

              But we have a bunch of rich, fatcat politicians who probably never play or even think about the lottery, whose heads are so far up their rearends they won't take advantage of it.

              If they want to know what lottery players will buy more of, why not just ask us? We're right here for free at Lottery Post. We're a concentration of nothing but lottery players, a lottery focus group, a lottery think-tank, and we won't charge them one red cent.

              But watch em go hire a consultant now for a million dollars.

              Bastages.

              The reason they do that (hire consultants rather than interact directly with the player base here at LP) is because it is run strictly as a business.  The only thing that really matters to most at that level is the bottom line net profit that goes to the state.  Because THAT is what they are held accountable for by the state legislature.

              There are some lotteries that walk that line (between running it as a strict business and being player-friendly) better than others.  Typically, you will find such lotteries with some of their folks occasionally chiming in here.  Think about the ones you have seen post here over the years.  That should give you a good indication.

              There are some others I can think of that are very good, but unfortunately the people in every lottery organization have to be very careful about what they say in public, so they're naturally shy about posting.

               

              Check the State Lottery Report Card
              What grade did your lottery earn?

               

              Sign the Petition for True Lottery Drawings
              Help eliminate computerized drawings!

                LANTERN's avatar - kilroy 28_173_reasonably_small.jpg
                Tx
                United States
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                May 4, 2004
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                Posted: October 31, 2011, 10:41 pm - IP Logged

                It might work, people don't win anyway, so Who will notice? People are used to buying and not winning anyway, show them the bone, but don't let go of it.

                You train an animal with food, once they learn the trick, they no longer need the food to keep on doing the trick.

                When no doubles came, people kept on buying them anyway, Where people happy that the boxed pick 3 numbers went down from 220 to 120? No! They got upset that no doubles would come out.

                Pay out half as much from now on, a few will notice right away or soon, some will notice sooner or later, but at least 1/4 of the players might never notice and perhaps half of the players or more will keep on playing anyway, probably most of them will play again once they are over their being upset.

                BibleOnline  ParishesOnline  ChristianRadioOnline   MassOnline   Mass

                "Ten measures of beauty descended to the world, nine were taken by Jerusalem."

                  rdgrnr's avatar - walt
                  -Ridge Runner- Oracle of the Appalachians
                  Way back up in them dadgum hills, son!
                  United States
                  Member #73904
                  April 28, 2009
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                  Posted: October 31, 2011, 11:36 pm - IP Logged

                  The reason they do that (hire consultants rather than interact directly with the player base here at LP) is because it is run strictly as a business.  The only thing that really matters to most at that level is the bottom line net profit that goes to the state.  Because THAT is what they are held accountable for by the state legislature.

                  There are some lotteries that walk that line (between running it as a strict business and being player-friendly) better than others.  Typically, you will find such lotteries with some of their folks occasionally chiming in here.  Think about the ones you have seen post here over the years.  That should give you a good indication.

                  There are some others I can think of that are very good, but unfortunately the people in every lottery organization have to be very careful about what they say in public, so they're naturally shy about posting.

                  Thanks Todd, I understand that and agree.

                  I just get really annoyed with the way things are done here and how unresponsive they are to the players. It makes me recall when I called in to report a clerk trying to cheat my wife out of some of the winnings on a ticket I sent her in to cash for me.

                  I explained what happened to the guy on the phone and he didn't even want to know where it happened. He just told me to be careful from now on.

                  Just another reason I drive to Va to play the lottery like a lot of other Tennesseans. Do they know about that? Nope. Do they care? Nope. And what do they want to do about all this lost revenue? Cut back on prizes to the players. Brilliant.


                                                               
                                       
                                                           

                   

                   

                   

                   

                                                                                                                     

                  "The only thing necessary for evil to triumph is for good men to do nothing"

                                                                                                              --Edmund Burke

                   

                   

                    Todd's avatar - Cylon 2.gif
                    Chief Bottle Washer
                    New Jersey
                    United States
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                    May 31, 2000
                    21432 Posts
                    Offline
                    Posted: October 31, 2011, 11:57 pm - IP Logged

                    Thanks Todd, I understand that and agree.

                    I just get really annoyed with the way things are done here and how unresponsive they are to the players. It makes me recall when I called in to report a clerk trying to cheat my wife out of some of the winnings on a ticket I sent her in to cash for me.

                    I explained what happened to the guy on the phone and he didn't even want to know where it happened. He just told me to be careful from now on.

                    Just another reason I drive to Va to play the lottery like a lot of other Tennesseans. Do they know about that? Nope. Do they care? Nope. And what do they want to do about all this lost revenue? Cut back on prizes to the players. Brilliant.

                    Wow, that's really pathetic.  (About the ho-hum response to your phone call.)  Not surprising though.

                    I can't tell you how many e-mails I get every week from people complaining about a local lottery ticket vendor.  I do my best to refer these people to their state lottery to file a complaint, but it's sad to think how few complaints will be taken seriously by them.

                    I hate that gambling in a state is ruled by a monopoly -- the state government.  Think about it:  the government (which rarely runs ANYTHING efficiently) has a complete monopoly over gambling in the state.  So people WILL buy lottery ticket, no matter what, and there is really no incentive to be sure the every-day GAMBLERS are happy.

                    I like your attutude: taking your wagers to a state that is more likely to listen to you and treat you right.  I wish everyone lived near a border and had that ability.

                    Actually, I have a more "progressive" wish than that:  how about letting people do what they want with their money.  Enough with the "morality" play of politicians who really don't understand what's in the Bible, but pretend to.  Gambling is not a sin, and it's not "bad" on the face of it.  It's not a "tax on the poor", and it's not a crazy addiction like drugs.  It's entertainment, and frankly I could care less if some politician does not like how I spend my money.  It's MY MONEY.  I can't risk it the way I choose?  That's utterly ridiculous.

                     

                    Check the State Lottery Report Card
                    What grade did your lottery earn?

                     

                    Sign the Petition for True Lottery Drawings
                    Help eliminate computerized drawings!

                      rdgrnr's avatar - walt
                      -Ridge Runner- Oracle of the Appalachians
                      Way back up in them dadgum hills, son!
                      United States
                      Member #73904
                      April 28, 2009
                      14903 Posts
                      Offline
                      Posted: November 1, 2011, 12:36 am - IP Logged

                      Wow, that's really pathetic.  (About the ho-hum response to your phone call.)  Not surprising though.

                      I can't tell you how many e-mails I get every week from people complaining about a local lottery ticket vendor.  I do my best to refer these people to their state lottery to file a complaint, but it's sad to think how few complaints will be taken seriously by them.

                      I hate that gambling in a state is ruled by a monopoly -- the state government.  Think about it:  the government (which rarely runs ANYTHING efficiently) has a complete monopoly over gambling in the state.  So people WILL buy lottery ticket, no matter what, and there is really no incentive to be sure the every-day GAMBLERS are happy.

                      I like your attutude: taking your wagers to a state that is more likely to listen to you and treat you right.  I wish everyone lived near a border and had that ability.

                      Actually, I have a more "progressive" wish than that:  how about letting people do what they want with their money.  Enough with the "morality" play of politicians who really don't understand what's in the Bible, but pretend to.  Gambling is not a sin, and it's not "bad" on the face of it.  It's not a "tax on the poor", and it's not a crazy addiction like drugs.  It's entertainment, and frankly I could care less if some politician does not like how I spend my money.  It's MY MONEY.  I can't risk it the way I choose?  That's utterly ridiculous.

                      Roger that, I like getting back to fundamentals constitutionally, but rights undefended are rights lost and we've given up so much by not defending them already that precedents have been set that may be impossible to supersede.

                      We have the TSA doing illegal random searches of vehicles on TN highways now and our state government is allowing it. Whoops, there goes another one.


                                                                   
                                           
                                                               

                       

                       

                       

                       

                                                                                                                         

                      "The only thing necessary for evil to triumph is for good men to do nothing"

                                                                                                                  --Edmund Burke

                       

                       

                        Avatar
                        Bondi Junction
                        Australia
                        Member #57242
                        December 24, 2007
                        459 Posts
                        Offline
                        Posted: November 1, 2011, 3:32 am - IP Logged

                        Tennessee lottery could raise additional revenue by offering a subscription service. I see for the web site, a subscription service is not offered.

                         

                         

                        Frequently Asked Questions  - Tennessee Lottery

                        Can I buy lottery tickets on the internet or through a subscription? Can I use my debit or credit card to purchase tickets?
                         
                        No. Tennessee law requires that all Lottery tickets must be purchased in-person at a participating retailer, and tickets can only be purchased with cash.

                        We all get a lot out of lotteries!

                          cbr$'s avatar - maren
                          Cordova,Al.
                          United States
                          Member #104485
                          January 15, 2011
                          252 Posts
                          Online
                          Posted: November 1, 2011, 4:17 am - IP Logged

                          I agree with Mr. Kyle, it would be nice if they maked  it legal to use a debit card to purchase lottery tickets. It is a controled setting. The money in the bank.

                            TnTicketlosers's avatar - Lottery-065.jpg

                            United States
                            Member #71120
                            February 19, 2009
                            962 Posts
                            Offline
                            Posted: November 1, 2011, 6:53 am - IP Logged

                            That's why I go to Kentucky and Georgia to play.I go to exit 2 in Franklin Ky and what I call the loop at Georgia (Wildwood Pilot )The excitment Tim and I have going to play in another state is more powerful than anything here.When I go to Illinois to visit parents there is an extra 500 to play there,I can play for a long time on that.Playing here turns my stomach,it makes me sick to see a( purple Play Here) I know what it means   LOSE HERE  is what it should say.

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                                                                                                                                                                                                                                                                                                  ---------------------------

                                                                                                                                                                                                                                                                                                     ----------------------

                                                                                                                                                                                                                                                                                                        -----------------

                                                                                                                                                                                                                                                                                                           ------------

                                                                                                                                                                                                                                                                                                              --------

                                                                                                                                                                                                                                                                                                                 ----

                                                                                                                                                                                                                                                                                                                   -

                                                                                                                                                                                                                                                                                                                   Wink

                                                                                                                                                                        THAT WAS FUN BUT I"M RIGHT !!!!!!!!!!!