Declining Lottery Sales Concern State Controlling Board

Jun 11, 2013

Ohio Lottery officials are asking the State Controlling Board to renew the  contract with the company hired to operate the lottery, despite a decline in sales this year. 

Ohio Public Radio's Karen Kasler reports.

Lottery officials asked the state Controlling Board for money to renew the $57.2 million two-year contract with Intralot, the Greek company with offices in Georgia that’s been operating the Ohio Lottery since 2007.  But the lottery’s admission that traditional ticket sales are down brought this from Republican Sen. Bill Coley of Middletown:

BC:  We’ve been growing at a 6-8% per year, and now we’re experiencing a 1-2% drop and you anticipated a 5% drop. So pardon me if I don’t seem really happy about that, but it’s a huge dollar figure when we sit and do the budget.

And Democratic Rep. Chris Redfern of Port Clinton said he’s wondering why the lottery isn’t trying to expand into new areas.

CR:  Internet cafes, which were largely unregulated at least for the next 85 days till they sunset, the move to try to expand VLTs into veterans halls and other kinds of facilites. Is the Lottery, has, or could, or will the Lottery look into those opportunities to offset what is clearly lost revenue in traditional games.

The Lottery’s fiscal officer Greg Bowers says the lottery anticipated a 5% drop because Ohio’s four casinos are now all up and running, and lottery sales were hurt by the rise in internet cafes. A crackdown on those takes effect this summer. But he says video lottery terminals at the racinos at two of the state’s seven horseracing tracks, which are governed by the lottery, helped. And Bowers says the Lottery is cautiously looking at ways to broaden the base.

GB:  We’re doing everything in our powers with the policy direction that we’ve been given to maximize our profits at this time.

Lottery officials say they’re hoping for another record year of profits, and for $2.7 billion in sales this year from 150 products at 10,000 retailers, and that makes Ohio one of the top ten lotteries in the country. So that brings up a question that’s been tossed around for a while, this time asked by a reporter of Bowers after the Controlling Board meeting.

Joe Hallett, Columbus Dispatch: Are you aware of any plans to privatize the Lottery?
Bowers: I’m not in a position to answer that.

The Lottery may be able to branch out, but it will not be able to sell tickets on line, if a provision in the House budget gets through the conference committee. The Lottery is on the clock to do something – the Controlling Board okayed the contract request, but wants lottery officials to submit a report on changes that have been made six months from now.