The price of a tri-state lottery ticket in New England increased from $1 to $2 along with the jackpot size two years ago, which was a bid to save a waning game, and it actually worked. State lottery
Charlie McIntyre, executive director of the lottery says that sales and revenue both increased 25 percent in New Hampshire before leveling off. Lottery numbers
But, in spite of this, officials in Tennessee say they have no certainty that similar changes to the Powerball game will yield similar success.
The Multi-State Lottery Association, owned by 33 state lotteries, has no specific sales projections for the revamped Powerball game, even though they have been doing research on this for the past five years, said Tennessee Lottery Corporation CEO and President Rebecca Hargrove.
Still, Hargrove is confident that even if the price increase could mean an initial drop in sales when it goes into effect Sunday, the huge jackpots will eventually attract more people to play the game and to play it more often.
Which, in the long run, could mean more money for higher education scholarships, she said.
“Research indicates that this is exactly what players want,” she said. “Powerball sales depend on the size of the jackpot so much, that the best would be for quickly getting hits and quickly get the jackpot rolling.
“By the end of the fiscal year, we will see the impact.”
In the meantime, administrators in higher education have no choice but to trust those predictions will come true.
“Our concern is there not be any decrease in revenue, because the program has already outpaced revenue as it stands now,” said Claude Pressnell, president of the Tennessee Independent Colleges and Universities Association and a member of the Senate Lottery Stabilization Task Force that met this fall to come up with solutions for the shortfall.
At the University of Tennessee, administrators are looking to maximize the dollars available for the lottery-funded scholarships, but rely on the lottery corporation to raise revenue, said Hank Dye, vice president for public and government relations for the UT system.
For fiscal year 2011, Tennessee got $293.5 million in lottery proceeds to support K-12 education as well as higher education.
According to lottery officials, Powerball made up about 7.6 percent of total lottery sales in Tennessee in 2011 and the majority of sales — about 80 percent — come from instant tickets.
Senate Finance Committee Chairman Randy McNally, R-Oak Ridge expressed frustration because at the present moment a higher percentage of revenue isn’t being directed to the education fund instead of prize money.
The jackpots are expected to grow under the new format.
“I really don’t know what type of impact the changes will have on proceeds used for scholarships, but I know those proceeds have shrunk in relation to total amount of lottery dollars spent,” McNally said. “What we’ve looked at trying to do is maximizing the amount the amount of money that goes into scholarships.”
State law requires that 35 percent of its revenue should go to the education fund, “or an amount that maximizes the net lottery proceeds.” In the last fiscal year, the lottery returned 26.5 percent.
Let’s hope that this change does the lottery good so many more students can benefit from it.