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New Florida lottery law increases prizes

Florida LotteryFlorida Lottery: New Florida lottery law increases prizes
Florida lottery players soon will rake in more dough when they win games such as Lotto, Mega Money and Fantasy 5, thanks to a bill signed into law Thursday by Gov. Jeb Bush.

Bush, an outspoken critic of gambling, and state lottery officials are betting that the higher payouts will boost ticket sales for the games, similar to a measure passed three years ago that doubled the sales of scratch-off games.

Higher sales should mean more money for education, which is the stated purpose of the new law. Although increasing the payouts will decrease the percentage of ticket sales going to education, officials say the overall growth in income will boost education dollars.

Bush said he was signing the bill because the lottery pays for Bright Futures scholarships — a program whose growth will exceed its finances in coming years if nothing is done to increase lottery proceeds.

But even the best-case scenario shows that most of the extra money will go back to the lucky winners, not to education.

According to state estimates, boosting payouts from the current 50 percent of gross revenues to 60 percent would increase ticket sales by nearly $1 billion, but would mean only $103.8 million in extra money for education. Winners would net an extra $774.3 million and the state would get an extra $108.6 million for administration of the program.

Under current law, a $1 billion increase in sales would mean $390 million extra for education, but there's no reason to believe sales would increase that much without the impetus of larger payouts.

Florida law currently mandates that at least 39 percent of the revenue goes to the Education Enhancement Trust Fund, which is to be used for educational items such as school construction and Bright Futures scholarships.

Lottery officials have not determined how the increase in payouts will be handled for what they call their online games — Florida Lotto, Mega Money, Fantasy 5, Play 4 and Cash 3.

They must determine, for example, whether to use all of the extra money in a game such as Lotto for a Pick-6 payout, or whether to spread it among the 3-, 4- and 5-match winners.

Or they could use the extra money in special one-time promotions with higher jackpots.

Officials say they plan to increase the online payouts from 50 to 53 percent this year, then to 55 percent next year and to as much as 60 percent soon afterward.

A legislative revenue estimating conference predicted that increasing payouts for online games to 54 percent this year could hike sales by nearly $400 million, putting an extra $65 million into the education trust fund.

Last year, the Florida lottery generated more than $3 billion in sales of instant, or scratch-off, tickets and online tickets combined. Of that, about $1 billion — or about 34 percent — went to education, and $1.7 billion was given away in prizes.

Since 2002, when lottery officials began to increase the payouts on instant tickets, sales have more than doubled — from $662 million in 2001-02 to $1.36 billion in 2003-04, making instant ticket sales nearly half of all lottery sales.

Online sales grew by only 14 percent during the same period.

But the instant ticket sales contribute only 35 percent of the total lottery money transferred into the education trust fund.

The new law gives lottery officials unregulated authority to vary the percentages of gross revenues that go back to players as prize money, which in turn lowers the percentages of revenues going to education. But the law requires that the "percentages must be established by the Lottery in a manner designed to maximize deposits in the Educational Enhancement Trust Fund."

The legislative revenue estimating conference estimated that the maximum benefit to the fund would be a 60 percent payout, which would reduce the percentage going to education to 29 percent. Eleven percent is always reserved for administration of the program, including payouts to stores that sell lottery tickets.

Research shows that increasing prize payouts for instant tickets still nets a "good transfer" for education, Bureau of Economic and Demographic Research analyst Pam Johnson said.

But, she cautioned, no such evidence exists for the online games.

"Basically, we don't expect to see nearly the same kind of response," she said.

And there is no guarantee in the new law that the current amount of money deposited into the education trust fund will continue if ticket sales fail to meet expectations.

The bill signed by Bush also requires that 80 percent of unclaimed prizes to go directly into the education trust fund and 20 percent to go back to the Florida Lottery.

Previously, lottery officials could increase the payouts of online games by dumping unclaimed prize money, about $30 million a year, into the prize pools.

But a legislative analysis said that the "direct transfer of unclaimed prize money would generate no new money for education."

"Taking the unclaimed prize money would mean the Lottery would transfer that much less money from sales," the analysis said. "This loss would be offset by the deposit of the unclaimed prize money into the EETF, resulting in no net gain for education."

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30 comments. Last comment 11 years ago by Tnplayer805.
Page 1 of 3

United States
Member #379
June 5, 2002
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Posted: May 29, 2005, 10:07 am - IP Logged

Two thoughts:

1) Jeb Bush won't bring Powerball or MM to his state, but he OKs the Florida Lottery to pay out a higher percentage to winners;

2) Why can't NY improve the paltry 38%-40% return in Lotto?

    Todd's avatar - Cylon 2.gif
    Chief Bottle Washer
    New Jersey
    United States
    Member #1
    May 31, 2000
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    Posted: May 29, 2005, 10:09 am - IP Logged

    Nice job Jeb! 

     

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

     

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


      United States
      Member #379
      June 5, 2002
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      Posted: May 29, 2005, 10:10 am - IP Logged

      todd:

      FL still needs to go multi-state.

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        Chief Bottle Washer
        New Jersey
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        Posted: May 29, 2005, 10:30 am - IP Logged

        One of the really interesting things about Jeb Bush signing this bill is that it shows he values the dollars to education more than his dislike of gambling.  To me, it is a promising indication that he may be open to Powerball in Florida.

         

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

         

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


          United States
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          Posted: May 29, 2005, 10:36 am - IP Logged

          todd:

          I hope you're right.


            United States
            Member #379
            June 5, 2002
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            Posted: May 29, 2005, 11:22 am - IP Logged

            The lower tier prizes in FL Lotto are already generous (compared to NY Lotto), so FL should add the excess money to its Lotto jackpot (start at $4 million?)

            www.flalottery.com

            www.nylottery.org

              MADDOG10's avatar - smoke
              Beautiful Florida
              United States
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              July 18, 2004
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              Posted: May 29, 2005, 11:48 am - IP Logged

               now thats the kind of "open minded" thinking we need in all lotteries.  cogratulations to Mr. Jeb Bush for showing he the intestonal fortitude to keep an open mind, while still being an open critic of gambling..... 

                                                           

                                                             "  When Injustice Becomes Law, Resistance Becomes Duty "

                Tnplayer805's avatar - G 14_v78828750_Small.JPG
                North Dakota
                United States
                Member #13397
                April 5, 2005
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                Posted: May 29, 2005, 12:00 pm - IP Logged

                I think FL will join powerball, however, it won't be for a few years. 

                How are you going to win if you don't play?

                  LOTTOMIKE's avatar - cash money.jpg
                  Tennessee
                  United States
                  Member #7853
                  October 15, 2004
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                  Posted: May 29, 2005, 5:21 pm - IP Logged

                  PLEASE tell me they aren't going to raise the price of a regular online ticket to make this happen....

                    Avatar
                    Redmond WA
                    United States
                    Member #5966
                    July 29, 2004
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                    Posted: May 29, 2005, 6:09 pm - IP Logged

                    Is Mega Millions going to stay put at 12 states?

                    I think Florida would be a good fit for MM.


                      United States
                      Member #1759
                      June 29, 2003
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                      Posted: May 29, 2005, 11:13 pm - IP Logged

                      I doubt very seriously an increase in ticket price will occur if it does that might cause some problems with players, us joining Mega-Millions I guess would be okay but the FL Lottery Commision might not want it too compete against the popular Mega-Money game which is somewhat similiar only we have 4 picks and less numbers for the Bonus Ball.

                        Todd's avatar - Cylon 2.gif
                        Chief Bottle Washer
                        New Jersey
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                        Posted: May 29, 2005, 11:32 pm - IP Logged



                        Is Mega Millions going to stay put at 12 states?

                        I think Florida would be a good fit for MM.



                        That's what they have said in the past.  They said the next big state (CA) would be the last.

                         

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

                         

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

                          Tnplayer805's avatar - G 14_v78828750_Small.JPG
                          North Dakota
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                          Posted: May 30, 2005, 12:13 am - IP Logged

                          I think powerball would be best for FL.  (Anyone else sense another matrix change if FL joins?).  FL's lotto is ok,however, it seems like everyother draw someone wins it.  Not really a jackpot ruled lottery if you ask me.  Also, powerball and the FL lotto would be played on the same night.  That could be bad for FL lotto if they do add powerball.  If I was FL's director this is what I would do:

                          1. Join Powerball. 2. Move Mega Money drawings to Monday and Thursday Nights.  3. Move the FL lotto to Tuesday and Friday Night. 4. Take out the $2 million MAX jackpot for Mega Money.  5. Add a cash option to Mega Money.  6. Add midday drawings to Fan 5, cash 3, and Pick 4.  The Florida Lottery is a great lottery and when I move to Mobile, AL in August I'll have to drive a little and try it out.

                          How are you going to win if you don't play?


                            United States
                            Member #1759
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                            Posted: May 30, 2005, 12:19 am - IP Logged

                            Mega-Millions would be a better choice than PowerBall but Mr.Jeb Bush may never make a decision too join either of them personally I've always liked Mega-Millions over PowerBall.I can't wait too see how much the Prize payouts will increase I already e-mailed them too see what they say.