Ohio Lottery Commission officials say a recommendation from Ohio's new Governor that they reduce prizes to give their profits a boost would have the opposite effect.
Lottery officials responded yesterday to a report from Gov. Ted Strickland's transition advisers that said the lottery has an "inordinately high percentage of prize payouts."
The advisory panel last month asked lottery commissioners to consider scaling back the 59 percent it returned in prizes, which was higher in 2004 than what Michigan and Pennsylvania paid out.
The recommendation didn't take lottery commissioners by surprise.
"We have an ongoing debate on whether our prize payments are too high," said Mark Dottore, chairman of the Ohio Lottery Commission.
Although the lottery has improved sales in recent years, that hasn't translated into more money for education, which is where profits are sent.
Sales are up nearly 16 percent since 2001, but the amount of money that schools received has increased by less than 2 percent.
Mike Abouserhal, the lottery's executive director, acknowledged at a commission meeting yesterday that there's room to improve profits but said that lowering prizes on instant scratch-off tickets - where payouts are the highest - is not the way to go.
"There's a direct correlation between higher prize payouts on instant games and ultimate profitability," Abouserhal said.
He was backed by Dottore and Commissioner Erskine Cade, who said Strickland's advisers did not have enough information to reach the recommendation they made.
Abouserhal noted that Massachusetts pays out 72 percent on instant tickets and has the higher per-capita sales in the nation. He also pointed out that payouts in surrounding states have increased in recent years, while Ohio's have remained steady.
"If you look at the best practices in the industry, you'll see we're significantly behind most other states," he said.
Tee Tee Taylor, 47, of Cleveland, left the Gateway Newsstand at Tower City with a handful of instant tickets yesterday. She said a decrease in prizes would affect the amount she spends.
"I'd probably slack up," Taylor said. "You're already losing a lot of money."
The governor has reviewed the advisory panel's report but has not made a decision on whether to back any of its recommendations, Strickland spokesman Keith Dailey said.
The majority of the lottery's sales increase over the past few years has been in instant tickets, and the reason more of that money hasn't gone to schools is that the profit margin for those games is slimmer, Abouserhal said.
That's why he's focused on increasing sales in other games, including Pick 3, Pick 4 and Classic Lotto.
The lottery already has shuffled its lineup twice in the past 18 months, first replacing Super Lotto Plus with Lot 'O Play, which had disappointing sales and was scrapped for Classic Lotto last month.
The lottery has scaled back prizes in the Classic Lotto drawings. Profits are expected to increase because Classic Lotto has a payout of 55 percent compared with up to 80 percent for the old Super Lotto Plus.
Abouserhal expects to present commissioners with a product strategy next month that will improve sales for those games.