LA Lottery planning for a post-COVID-19 world
By Kate Northrop
BATON ROUGE, La. — With lower game participation levels amidst the nationwide COVID-19 stay-at-home orders, it is no surprise that state lottery revenues have taken a hit. Yesterday, Louisiana lottery officials announced that this would affect the proceeds used to help pay for K-12 public education.
Louisiana law requires that at least 35% of lottery proceeds be transferred to the state treasury and contribute to public education. About 53% of sales fund prizes while less than 6% is responsible for running the lottery.
In the fiscal year's third quarter ending March 31, the Louisiana Lottery Corporation recorded $123.9 million in revenue, bringing year-to-date contributions to more than $124.8 million. This marks a 5.7% decrease compared to last year's third quarter and a $16 million decline year-to-date. $43.3 million was transferred to the state treasury and dedicated to K-12 education this quarter.
However, sales for multi-state games like Powerball and Mega Millions were already down 30%-50% before the governor's stay-at-home order. Louisiana Lottery Corp. President Rose Hudson attributed these figures to a dearth of sizable jackpots over the last nine months. "Players have come to expect large, $400 million-plus Powerball and Mega Millions jackpots," Hudson said in a news release. "The recent suspension of minimum starting jackpots for these multi-state games has exacerbated this reality."
Each year, the Louisiana Lottery contributes over $150 million to K-12 public education. The Lottery also provides compensation to 3,000 vendors in Louisiana including convenience store chains, family-owned small businesses and grocery stores in addition to its employees. The Lottery's total contribution to education this year remains to be seen given the public health crisis.
Scratch-offs, on the other hand, have seen an upswing in sales for the first nine months of the fiscal year, up 4.1%. Considering that scratch-off games make up about 49% of the lottery's total sales, brick-and-mortar retail is not only integral to state lottery revenue, but to the lottery enthusiast's customer experience as well. The Louisiana Lottery is looking to explore alternative strategies to address a new post-COVID-19 reality and remain relevant, which could include creating retailer customer service solutions.
"People will continue to shop but will demand an experience that they cannot find online. That could be a grab-and-go convenience, learning something new or being entertained while shopping," Hudson says. "Lotteries need the freedom to diversify the ways they can deliver their products, and they should also look for ways to reduce the "high touch" nature of their transactions at retail."
Despite some retailers remaining open in Louisiana for essential purchases at the beginning of the nationwide health crisis, many of them chose not to sell lottery products due to reduced staffing and hours and the amount of customer interaction required to process a lottery transaction. Over time, becoming accustomed to the current situation combined with the loss of Lottery revenue encouraged some of those retailers to resume the sale of those products once more.
The Lottery also adjusted the prize claims process as a result of the continued stay-at-home order. Originally, prizes larger than $600 were required to be claimed in person or by mail with an original ticket. As of May 1, winners of $5,000 or less on any Louisiana based draw-style game ticket or scratch-off ticket are now able to mail in photocopies of their winning tickets for payout. This emergency rule change aims to ease the burden on players who are worried about losing their ticket in the mail and are simultaneously concerned about going out in public amidst the coronavirus outbreak.
The emergency rule change is in effect until lottery claims offices are fully operational.
To claim winnings under this new rule, players should sign and complete the information on the back of their winning ticket and ensure that all barcodes are clearly visible (scratch-off material completely removed from scratch-off tickets). Along with a photocopy of the front and back of the winning ticket, winners must include a completed claim form and a photocopy of their valid driver's license or current picture identification. The contents can be mailed in a single envelope to the address listed on the official Louisiana state lottery website.
The Lottery also advises all players to retain the original winning ticket in the event there is an issue with delivery but reserves the right to require an original ticket if there is a question regarding the claim. Prizes of over $5,000 and Powerball and Mega Millions prizes still require the original winning ticket to be paid out.
Additionally, players holding tickets winning prizes set to expire March 24 through May 15, 2020 will have until August 15, 2020 to claim their prize.