The lottery agency released figures yesterday for the fiscal year that ended June 30 showing that sales increased $15 million to $1.32 billion - a 1.1 percent increase. The amount of money paid to the state increased slightly less than $1 million to $444 million, according to lottery Director Buddy Roogow.In its announcement, the agency put a positive spin on the latest numbers, noting that it was the fifth-straight record year for the lottery.

But David Roose, director of the Bureau of Revenue Estimates, said the sales increase fell short of the state's 5.1 percent estimate. As a result, he said, the lottery will pay about $9.5 million less into state coffers than had been expected.

Roogow said that wasn't bad for a year marked by bad winter weather and few big jackpots.

"We have, I think, done quite well compared to the rest of the country," Roogow said.

The lottery chief said budget officials set ambitious goals after a $100 million gain in sales and $36 million jump in revenue the previous year.

"We can't hope to achieve that kind of growth each year," Roogow said.

The agency used its release of year-end numbers to plug Gov. Robert L. Ehrlich Jr.'s proposal to allow slot machines at Maryland racetracks.

"Marylanders continue to enjoy playing Lottery games in ever-increasing numbers," Ehrlich said in the agency's news release. "The integrity of the games and their popularity among adults in Maryland suggests that carefully monitored expansion of gaming to include video lottery terminals, similar to that provided in West Virginia and Delaware, would be most successful."

Roogow said competition from slot machines in neighboring states might be one of the reasons for the lottery's nearly flat sales. He said he has no proof that slots players are spending less on the Maryland Lottery, but noted that "they're spending their time and money in Delaware and West Virginia."

Lottery sales were boosted by a $183 million jackpot in the multistate Mega Millions game in June. Roose said the state's shortfall in lottery revenue was partly offset by the fact that a Marylander, Bernadette Gietka, won the $183 million prize - yielding state income tax revenue of $8.5 million.

"If she hadn't been a Maryland resident, we wouldn't have gotten that $8.5 million," Roose said.

Roose said the lottery shortfall is a small part of the state's revenue problems. He said his agency now expects the state to fall $50 million to $100 million short of the $9.4 billion in revenue anticipated in the budget.

Despite having a winner from Maryland, Roogow said Mega Millions was a bit of a disappointment because only one large prize came up during the fiscal year. Usually, he said, the agency can expect to see two or three jackpots of $100 million or more a year.

Roogow said the lottery agency set sales records for its Keno, Pick 4 and scratch-off games. Lotto, however, "is not doing very well," Roogow said. He said players are not excited by the relatively modest jackpots.

Roogow said the agency is planning to introduce a new game this winter in an effort to boost sales. The new game would allow players of numbers games to piggyback an "instant winner" option onto their tickets - in effect letting them play two games at once.