Michigan Lottery Adds New Games

Sep 15, 2003, 3:53 am (1 comment)

Michigan Lottery

Bettors will have more ways to gamble in Michigan next month, and they'll be able to do it in bars and restaurants across the state.

State officials hope the new games, which include Club Keno and pull-tab games, will draw more money into state coffers as the struggle to balance the budget continues.

The Michigan Lottery saw ticket sales increase 4.5 percent to $1.68 billion in the budget year that ended in September 2002, according to its most recent annual report.

Gov. Jennifer Granholm, who proposed the new games, hopes they will add $50 million in the next fiscal year.

Legislators last year gave the green light to a Sunday lottery drawing, 500 instant lottery ticket vending machines and a Change Play game intended to dventually generate about $1.05 billion.

The Michigan Lottery accurately estimated that the additional drawings would generate about $70 million in sales. But the lottery missed on its estimate for the Change Play game.

The Change Play game allows players to use change from other purchases - from 25 cents to 99 cents - to buy a lottery ticket. It was expected to generate $20 million in sales a year, but only made $4.6 million in its first year, Lottery spokeswoman Stepheni L. Schlinker said.

Lottery officials don't yet have final figures for lottery revenue generated in the fiscal year that ends Sept. 30.

But every dollar spent on a lottery ticket puts more than 35 cents into public education in Michigan. In the fiscal year that ended Sept. 30, 2002, the School Aid Fund received $613.5 million from the lottery, a 4.5 percent increase from the previous year.

Although lottery sales increased, Lottery Commissioner Gary Peters said it is becoming increasingly difficult for state lottery games to compete with Michigan's 20 casinos.

Lottery officials hope to give customers some of the feeling they get at casinos through Club Keno and pull-tab games in bars and restaurants, Peters said. The state plans to begin offering the new games next month.

"The lottery faces some pretty intense competition out there," Peters said. "It's a competitive environment and the economy is soft. With the new games on board next year, it's looking good."

Club Keno will be played continuously from 6 a.m. to 1:45 a.m. A closed circuit television will broadcast numbers randomly picked by a state computer into places where people have stopped to eat or have a drink. Gamblers who match the maximum of 10 numbers in Club Keno will win $100,000. Bettors can pick just one number, which would pay $2. They have a range of other options as well.

Numbers for the present Keno game, which players can find at convenience stores and other lottery locations, are drawn only once each evening. It won't be affected by the new game at bars and restaurants, lottery officials said.

Peters said he hopes to begin offering Club Keno in at least 1,000 bars and restaurants Oct. 27. The lottery is signing bars to offer the game.

Michigan's Club Keno game will be similar to those offered in Massachusetts, Maryland, New York, Kansas, Georgia, California, Oregon, Rhode Island and West Virginia.

Maryland's Keno game has been successful over its 10 years, said Buddy Roogow, Maryland State Lottery director. Keno games being played at a little less than half of Maryland's 4,000 retailers generate about $7.5 million in sales a week, he said.

Restaurants and bars next month also will begin selling $1 and 50 cent break-away lottery tickets that have cash prizes from $1 to $200. Players peel off perforated tabs revealing windows with symbols, similar to a slot machine, and prizes are paid immediately where the ticket was bought.

Lottery officials said they don't expect the new games to hurt daily game sales because they attract different kinds of gamblers.

Economist William Eadington said offering Club Keno and pull-tab games will attract bettors who aren't playing the state lottery.

"Lottery purchases are dream buying ... and casino-goers are more driven by entertainment. People view it in a different context," said Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno.

Some grocers and convenience store owners are worried the new gambling venue will hurt their lottery business by drawing off customers to bars and restaurants.

"There's a concern that there's only so much money to go around. People are watching their money," said Linda Gobler, president of the Michigan Grocers Association. "We just hope that we don't get left by the side of the road."

Although the new games saved the state from having to make some budget cuts, state Rep. Jerry Kooiman said he doesn't like expanding the lottery to balance the state budget.

New lottery games bring in more money, but the money comes from poor people trying to get rich quick, the Grand Rapids Republican said.

"You're simply providing different venues for people trying to strike it rich," Kooiman said. "I just don't think that, from a societal standpoint, it's a lot to bank on."

Let the games begin

CLUB KENO: It will be played every five minutes in at least 1,000 alcohol-serving establishments statewide beginning Oct. 27. Eventually, the state wants to have the game in as many as 3,000 bars and restaurants. Gamblers who match the maximum of 10 numbers in Club Keno will win $100,000. Bettors can pick just one number, which would pay $2. They have a range of other options as well. Club Keno will be played continuously from 6 a.m. to 1:45 a.m. A state computer will randomly pick the numbers, which will be broadcast on closed circuit television. Ticket prices range from $2 to $20. It's expected to generate $25 million a year.

PULL-TAB GAMES: Bars can sell $1 and 50 cent break-open lottery tickets that have a top prize of $200. Players peel off paper tabs to see if they have won a prize. It's expected to generate $25 million a year.

CHANGE PLAY: Players can use change from other purchases to buy a lottery ticket. The price for Change Play tickets range from 25 cents to 99 cents. There are six winners a night and they receive payouts according to how much they bet and the size of the day's pool. The game began Oct. 13, 2002. It was expected to generate $20 million in sales annually, but made only $4.6 million in its first year.

SUNDAY DRAWINGS: Another day for drawings for the Pick Three and Pick Four games, the Michigan Roll Down and the Keno game. Since it began Oct. 6, 2002, it has netted $70 million in ticket sales, the amount lottery officials had expected.

LOTTERY VENDING MACHINES: The machines are similar to ATM machines and allow lottery players to buy tickets in stores such as Kroger and Meijer. There are 228 instant vending machines in stores across Michigan; dventually there will be 500. In their first five months, the machines have sold more than $2 million in tickets. When all 500 are installed, they're expected to generate $15 million a year.

CORE GAMES: Michigan Millions, Michigan Rolldown, Daily Pick Three and Pick Four games and Keno generated about $813 million in sales in the budget year that ended Sept. 30, 2002.

INSTANT GAMES: The Michigan Lottery introduced 62 new instant games, including a $20 scratch-off ticket, in the 2002 budget year. Instant ticket sales totaled more




I told you "Change Play" would wear off quickly, since there are only six winners STATEWIDE nightly.

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