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Nationwide, lotteries struggle to stay competitive

Insider BuzzInsider Buzz: Nationwide, lotteries struggle to stay competitive

Lotteries across the country are struggling to remain competitive, retaining their players while increasing their bottom lines.  Last year, 25 U.S. lotteries reported increased sales, but New York's lottery was one of six that had higher profits.

One key to New York's success is that the New York Lottery continues to attempt to be fun and entertaining, said former Lottery Director Nancy Palumbo, who was interviewed before leaving the division late last year.

"We're constantly challenged to keep our games new and different," she said. Up to 40 varieties of instant games are offered, with a couple new games each month.

The Lottery has also begun "creative partnerships" with outside agencies to increase awareness, and hopefully sales.

When Universal Studios came out with "King Kong" last year, the Lottery unveiled King Kong lottery tickets. This year, the Lottery teamed up with Major League Baseball for the introduction of a baseball-themed "Subway Series" instant ticket.

"It gets the excitement going," Palumbo said. "When people get excited about that, maybe they'll purchase multiple tickets."

The Lottery now is trying a 50-50 game, called "Raffles to Riches," with a maximum 1.5 million tickets to be sold for a Feb. 9 drawing. Odds will be the best ever (1 in 125,000) to win $1 million. The rub: Tickets cost $20 each.

Lotto sales began to slump when players experienced "jackpot fatigue," not bothering to buy tickets until jackpots were $10 million or more. So in 2002, New York joined the Mega Millions multistate game, giving players a chance to win even larger jackpots.

Even when the jackpot is high for Powerball, a similar multistate game not available in New York, sales tend to spike in New York as well.

"There's lot's more awareness in big jackpots," Palumbo said.

Palumbo said more changes are in the works, including tweaking the Lotto game March 1, offering players another tier of prizes if they pay an extra $1 for their tickets.

Sales of Lotto have declined more than 17 percent in the past year, with Mega Millions sales increasing more than 26 percent. That's significant because the state makes less per ticket on Mega Millions (35 cents on each dollar) than it does on Lotto (45 cents per dollar).

"We watch our numbers. We're like a business," Palumbo said.

The decline in sales is a major reason Lotto jackpots aren't growing very large. In recent weeks, when Lotto jackpots weren't won, jackpots increase by $1 million instead of larger increments.

"Players like bigger jackpots," Palumbo said. "We're looking at different ways of changing Lotto to make the game more exciting."

Another addition to the Lottery's bottom line came in 2004 with the arrival of video lottery terminals, or VLTs. There are now eight racetracks with VLTs throughout the state, including the largest, in Yonkers, which opened in October with more than 4,000 machines.

Now that the New York Lottery is involved in video gambling, can on-line betting be far behind?

"We are always looking at new technology out there," Palumbo said, noting that England allows wagering via cell phone. Internet wagering has also been discussed in the industry.

"That's something that's out there," Palumbo said. "Just like video gaming, when the Legislature decides it's time for the Lottery to move to the next step ... it's something that will be looked at."

Patricia McQueen, lottery and racing editor for International Gaming and Wagering Business magazine, said Internet and mobile gaming, while being studied, may be a long way from happening anytime soon.

"The government doesn't seem to want to allow it," McQueen said. "Nobody's trying that yet. Nobody wants to be the first to try it. But there's potential there."

In 2004, the New Jersey Lottery introduced instant tickets that had an online component. A player would buy a ticket at a store and get a code to access an Internet game to play as an added "entertainment value." The tickets were sold through 2005.

"It was an interesting foray, with mixed results," said Dominick DeMarco, a spokesman for the New Jersey Lottery. "In terms of response, the initial introduction was successful, but that interest wasn't sustained over time."

Bets taken online from the Internet have also been discussed. Congress would need to approve that.

"When it's decided federally, something will probably happen. That could open up a different format, but it doesn't seem to be happening anytime soon," said Margaret DeFrancisco, former New York Lottery director who now heads the lottery in Georgia.

DeFrancisco said there's also been talk about having a national lottery, but that also seems unlikely in the near future, because 41 states already have either Powerball or Mega Millions multistate games, both of which offer multimillion-dollar jackpots.

Instead, the trend in lotteries across the country is to offer "lots of variety and tickets approaching the $10 and $20 range," McQueen said.

Trade conferences also allow lotteries throughout North America to meet and share ideas, including their most popular games, advertising and marketing ideas.

Topics at the conferences include how to drive impulse purchases, attract lapsed players and target the next generation of lottery players.

The Journal News

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4 comments. Last comment 11 years ago by CASH Only.
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JADELottery's avatar - AMeOn 02.png
- Eagle Sun - Quantum Master
West Concord, MN
United States
Member #21
December 7, 2001
4025 Posts
Posted: January 31, 2007, 5:22 am - IP Logged

It's coming folks.... the $2.00 per line Games are on the way. You saw it here first. The Bottom Line is all that matters. This is a prediction you can count on.

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Use at your own risk.

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Douglas Paul Smallish

    United States
    Member #379
    June 5, 2002
    11296 Posts
    Posted: January 31, 2007, 9:52 am - IP Logged

    Ms Palumbo is no longer NY lottery director. A man took her place in November, hired by outgoing Gov Pataki.

    Trust me, the ONLY thing that can help NY Blotto 59 is an increase in the payout percentage, which for Blotto has always been 40%. I don't know for sure what the percentage(s) will be with NY Lotto Extra, but I suppose it will be the status quo.

      Greenwich, CT
      United States
      Member #4793
      May 24, 2004
      1822 Posts
      Posted: January 31, 2007, 10:05 am - IP Logged

      So, the NY Lotto $2 ticket will still allow for two lines to be played, correct?

        United States
        Member #379
        June 5, 2002
        11296 Posts
        Posted: January 31, 2007, 10:09 am - IP Logged

        So, the NY Lotto $2 ticket will still allow for two lines to be played, correct?

        The basic NY Blotto will still be two games for $1. Blotto Extra will be two games for $2. You will still have to play an even number of games either way (no Blotto Extra for $1 or $5, for example).