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Indiana lottery sales decline has officials probing illegal games

Indiana LotteryIndiana Lottery: Indiana lottery sales decline has officials probing illegal games

The Hoosier Lottery, faced with slumping profits, is struggling to get more people to play ticket games — in a world of electronic gambling.

In the budget year just ended, lottery officials expect to see about a 5 percent decline in profits, which reached $199 million last year, according to W. Edward Benton, the lottery's chief financial officer.

So what's eating into ticket sales? Smaller Powerball jackpots, for one thing, something Hoosier Lottery officials can't control.

The approximately 22,000 illegal gambling machines found in bars and fraternal lodges across Indiana also hurt the lottery. State officials can do something about these machines — often called Cherry Masters — that resemble computerized slot machines.

As the state Alcohol and Tobacco Commission steps up enforcement against illegal machines in businesses with alcohol permits, the lottery is trying to figure out whether those machines could be the key to boosting profits.

Hoosier Lottery Executive Director Esther Q. Schneider has asked the attorney general's office for an opinion as to whether current law allows the lottery to offer new games, such as video lottery gambling. Schneider said she would implement such a plan only with legislative support.

"There is demand," Schneider said. "We're looking at all of the different ways we can increase revenue and our bottom line. How can we improve our existing games? What new ones can we have? Should we get rid of any?"

Until this year, state officials largely have ignored illegal gambling machines, except for fines that barely made a dent in most bar business.

But in the past year, with Gov. Mitch Daniels' support, the Alcohol and Tobacco Commission has become more aggressive. Since January, 525 machines have been disabled, and state officials have confiscated about $30,000, according to Dave Heath, the commission's chairman.

And soon, Schneider said, she may be forced to start her own crackdown, enforcing a law that says that anyone with a lottery license has to abide by all state laws.

"We have retailers who have come to me and who know this is a problem. They say 'we will remove them when you tell us to, but will you look at other ways to replace our revenue?' " Schneider said. "The end result is the same. The machines have got to go."

The illegal gambling market is big business, generating an estimated $200 million to $350 million a year, lottery officials guess. None of that is being taxed.

For some bars and taverns, it's key to economic survival — and has been overlooked for years.

"It was almost accepted. It was understood," said Joe Underhill, owner of the Southside Tavern in Loogootee in Southern Indiana. His bar had three or four machines, but since the State Excise Police threatened to shut him down, he's removed them. Business has slacked off because of it as fewer people come in to eat his food and drink his beer.

"They've all of a sudden changed to this zero-tolerance policy," said Underhill, who added that he wouldn't mind if the machines were legalized and taxed.

Capturing the market for video gambling machines could be a huge boon for the lottery, which sends about 29 cents of every dollar gambled back to the state for profits (the rest goes for prizes, marketing, and bonuses for retailers.) Since 1989, the lottery has netted the state $2.6 billion. Nearly $800 million went toward lowering license plate taxes, and nearly $300 million went toward helping fund public schools.

Schneider is also looking at whether to offer keno (a fast-paced numbers game she said she would only institute with legislative support). She wants to market the Hoosier Lotto more since it has a larger profit margin than scratch-off tickets.

The lottery also is looking to save money within the organization. About 20 positions have been cut and salaries readjusted — beefing up areas like lottery security while cutting positions like the statistician and the director of administration.

Schneider also has banned Post-It Notes because of the cost.

"I have a duty to return as much money to the taxpayers as possible," she said.

Editor: The Lottery Post editorial staff proposes that the Indiana Lottery's insistence on using computerized drawings may have something to do with their sales decline, and would explain the public's desire to seek alternative gaming experiences.  Reverting back to mechanical drawing machines could produce the marketing event necessary to rejuvenate Hoosier Lottery revenues.

Indianapolis Star

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16 comments. Last comment 11 years ago by LOTTOMIKE.
Page 1 of 2

United States
Member #379
June 5, 2002
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Posted: July 11, 2005, 5:04 pm - IP Logged

I Agree! with the editorial.

    fiona$'s avatar - mystic
    New Member
    fort wayne, indiana
    United States
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    July 11, 2005
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    Posted: July 11, 2005, 8:22 pm - IP Logged

    The guys at the VFWs and other private clubs have been spending the same $$ on the cherry masters forever.

    no one buys the Hoosier lottery because the jackpots are low & like the editor said who wants computer drawings. Look at the unemployment Here, we don't have the money to spend on the scratch off games. Since we're suppose to keep it clean I won't even say anything about Gov Mitch. 


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      Posted: July 12, 2005, 3:33 pm - IP Logged

      I agree with this topic.

        LOTTOMIKE's avatar - cash money.jpg
        Tennessee
        United States
        Member #7853
        October 15, 2004
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        Posted: July 12, 2005, 4:08 pm - IP Logged

        everyone who is familiar with me already knows how i feel. the stupid computerized drawing they've been using to cheat people out of money is the reason people aren't playing there.players aren't dumb and they know whats up......

          Todd's avatar - Cylon 2.gif
          Chief Bottle Washer
          New Jersey
          United States
          Member #1
          May 31, 2000
          23277 Posts
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          Posted: July 12, 2005, 9:53 pm - IP Logged

          everyone who is familiar with me already knows how i feel. the stupid computerized drawing they've been using to cheat people out of money is the reason people aren't playing there.players aren't dumb and they know whats up......

          Amen to that.

           

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

           

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

            dvdiva's avatar - 8ball

            United States
            Member #2338
            September 17, 2003
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            Posted: July 13, 2005, 1:43 am - IP Logged

            well they need to do somethings to get people back.

            1. clean house of the corrupt people

            2. switch all games that could use ball drawings to ball drawings with web video available for these drawings

            3. have independent audits for the security of scratch tickets so no scams happen with them. 

            short of doing that they are just going to loose more money at a rapid clip. 

              Badger's avatar - adu50016 NorthAmericanBadger.jpg
              Wisconsin
              United States
              Member #1303
              March 27, 2003
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              Posted: July 13, 2005, 7:02 pm - IP Logged

              I Agree! with the editorial.

              ME TOO ! The turkeys need to WAKE UP !I Agree!

              ============

              How can you tell if a politician is lying?

              Answer: His lips are moving.

                Maverick's avatar - yinyang
                USA
                United States
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                October 29, 2004
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                Posted: July 13, 2005, 8:12 pm - IP Logged

                This disturbs me cos there may very well be other lotteries in different states adopting whatever crookedness is coming outta Indiana... seeing that they're getting away with it.

                To Lotteries: Stop recording our # combinations, and figure out another way to rollover the $$$.

                  LosingJeff's avatar - flower
                  Greenfield
                  United States
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                  February 2, 2004
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                  Posted: July 14, 2005, 7:18 pm - IP Logged

                  Jim 695 and I both knew that it was a matter of time before this was going to happen. People who have played for years are fed up. You absolutely cannot win in Indiana! It would be nice to get paid the odds, but when you only get about 1-2 percent back, if your lucky, it doesnt last long----Bankruptcy follows!  Good luck Indiana on trying to get ppl to play. How about going to balls so that people have some confidence in the system. As u all know, Indiana House Resolution 1521 failed because it never made it to the floor because of a walk-out----isnt that interesting.  Too bad, balls would have certainly boosted sales and confidence----but what does a stupid guy like me know about anything. Cant wait to run out and buy my losing tickets! My Motto "Off by one every other day? What a coincidence."

                    LosingJeff's avatar - flower
                    Greenfield
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                    February 2, 2004
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                    Posted: July 14, 2005, 7:24 pm - IP Logged

                    Werent they just boasting last year about record sales? That was a quick change now wasnt it. After buying a ridiculous amount of poker scratch offs (5 bucks a piece) and winning nothing, no wonder sales are down.  The payouts are herendously rediculous! Just go to the website and compare it to other states.

                      LosingJeff's avatar - flower
                      Greenfield
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                      Posted: July 14, 2005, 7:28 pm - IP Logged

                      Why does it take an act of the State Legislature to bring the balls back? The governor could order that tomorrow morning! Now that would be a great step in the right direction.

                        LosingJeff's avatar - flower
                        Greenfield
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                        February 2, 2004
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                        Posted: July 14, 2005, 7:47 pm - IP Logged

                        Governor Daniels, do Indiana a favor and make the Hoosier Lottery bring back the live ball drawings---advertise it and the sales will drastically increase.

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                          Posted: July 14, 2005, 8:05 pm - IP Logged

                          Decrease in sales? It isn't illegal redemption machines, it's their own fault. They have dishonest draws, corrupt retailers, a corrupt lottery overall. They've probably figured out how to rig Powerball in their favor behind MUSL's back. Trust me Hoosiers, the drive to Illinois, Kentucky, or Ohio is well worth it.

                          (insert signature here)

                            LOTTOMIKE's avatar - cash money.jpg
                            Tennessee
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                            Posted: July 16, 2005, 5:26 am - IP Logged

                            i agree on that,too bad indiana players are getting robbed blind.