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Kansas Lottery surpasses $1 billion mark in profits for the state

Kansas LotteryKansas Lottery: Kansas Lottery surpasses $1 billion mark in profits for the state

The Kansas Lottery has banked its first $1 billion while also marking its 20th anniversary.

At ceremonies Friday in Topeka, director Ed Van Petten said sales revenue transferred to the state treasury on Thursday pushed the game's all-time profits over the $1 billion mark.

"We are thrilled to tell you that the lottery has reached another milestone," he said.

The second billion won't take nearly as long after Kansas' state-owned numbers game morphs into state-owned casino operator under a new state law. The law will permit the lottery to operate four destination resort casinos, in addition to slot machines at state-licensed racetracks.

The lottery sold its first game ticket on Nov. 12, 1987.

Two decades later, combined sales of all lottery products have surpassed $3.2 billion. Of that sum, players won back $1.7 billion, or 52.8 percent. Retailers got $180.5 million in commissions, and the state treasury banked $1.004 billion.

Friday's ceremonies in Topeka included — what else? — a $580,000 cash giveaway among 20 lucky lottery players, including Terry Clark of Kansas City, Kan.

Jeff Boerger, Kansas Speedway president, also offered a few remarks.

Described by one lottery official as the poster child for economic development in the state, the speedway years ago received $6 million in state grants financed by lottery revenues to help construct what in less than a decade has become the state's top tourism attraction.

The lottery and the speedway have since evolved into a mutual admiration society. The lottery annually sponsors races, and Boerger said Kansas images and messages displayed during just one weekend of televised racing were valued at $1.6 million in advertising exposure.

"The Kansas Lottery has been a great partner," Boerger said. "From the initial financial incentives that helped encourage the location of the track in Kansas, to sponsorship of races ... they help us and we help them take their brand to the next level."

The relationship could grow even closer if state officials next year select the speedway's proposal from several vying for one available casino license in Wyandotte County.

Lottery sales have grown steadily, from $65.8 million in 1988 to $239.9 million in the 2007 fiscal year, which ended June 30.

Where does the money go?

From the state's share that totaled $71 million in fiscal 2007, 85 percent of the first $50 million was earmarked by law for the Kansas Economic Development Initiatives Fund. The rest, also by law, was set aside for state criminal justice and problem gambling programs.

All funds in excess of $50 million must be deposited in the state's general fund for annual appropriation by lawmakers. Last year that amounted to $21 million, a sliver of the state's $5.8 billion general fund budget.

Over the years the state's total cost to produce, manage and advertise the games has averaged about 13.3 percent of sales. Last year the figure was down to 9.8 percent.

"We're getting leaner," said Van Petten, who has been director since 2000. "We've done a little better every year."

Officials estimate that the state's 27 percent tax on casinos and 60 percent tax on racetrack slots could generate up to $227 million a year for the state treasury alone.

If the legislation survives a pending court challenge, the state's first one-armed bandits could be operating by spring at The Woodlands in Wyandotte County.

Casino construction will take a couple of years at still undetermined sites in Wyandotte, Sumner, Ford and Cherokee or Crawford counties.

The Kansas Lottery has been an industry innovator. In recent years it was the first to offer online poker (Kansas Hold 'Em), the first interactive Web-based game (eScratch) and the first multistate scratcher game (Midwest Millions, with Iowa). It was the second, after Iowa, to offer an electronic game card (Super 7's).

The Kansas Lottery has made 38 instant millionaires since 1998.

In the Kansas City area, Lois Hampton of Olathe won a $20 million Powerball jackpot in 1994, and Alden Oldsen, also of Olathe, tapped the multistate game for $15.1 million in 1996.

Three Kansas City residents hit it big in Kansas Cash Millionaires. Unidentified players from Wyandotte and Johnson counties won $1 million and $1.1 million in 1998. Gayle Fanning of Grandview won $1.1 million in 2001.

During the same span, the Wichita area claimed at least seven new millionaires, and Topeka had three.

The lottery's best years for making millionaires were 1990 and 1993, with four each. The worst years: 1989, 1992 and 2002, with zero.

The biggest cash prize ever awarded was a $50 million Powerball jackpot shared in 2000 by 26 airline co-workers from Tulsa, Okla., who back then had to cross the state line to play. Oklahoma started its own lottery in 2005.

Kansas Lottery by the numbers

  • 1986 "yes" votes...64%
  • Retailers today...1,850
  • Employees...80
  • FY 2007 sales...$239.9 million
  • All-time sales...$3.23 billion
  • Biggest prize...$50 million in 2000
  • Players who like Kansas' computerized drawing system...0

Total Kansas Lottery sales, and the state's take, in millions.

Kansas City Star

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