It's A Crapshoot For Lotteries

Visions of multimillion-dollar jackpots dancing in his head, Daniel Van Dyke used to play California's lottery every week. But he never won much, and now the 26-year-old San Francisco computer engineer buys tickets just once a month--if at all. "It's the same game every time," he complains. "It gets a little boring."

California's lottery is on a wicked losing streak. Half-hearted players like Van Dyke are one big reason. Revenues fell 14%, to $2.13 billion, in the fiscal year ended last June (chart). This year, sales may not break $2 billion. It's not just fun and games at stake either: At least 34% of lottery proceeds go to schools. Last year's decline left them with $176 million less than expected, contributing to salary and job cuts at already strapped districts. A recent poll found 46% of the state's adults now have a negative opinion of the lottery, up from 21% in 1985.

California may be in the worst straits. But a weak economy is hitting lottery revenues across the nation. Sales by the 33 U. S. lotteries edged up only 3% in the last fiscal year, to $20.4 billion. That contrasts with 8% growth the year before and 25% annual growth through much of the 1980s, when lots of new lotteries were starting up. A drop in such a large, diverse state as California, however, has other lotteries wondering where the wheel of misfortune will stop next.

LONG ODDS. California's plight points up a basic problem that an economic recovery may not solve: Such games as high-jackpot "lotto" and small-payoff "scratch" cards are wearing thin for current players and aren't luring new ones. Says Los Angeles gaming consultant Saul F. Leonard: "I don't see any kind of significant growth."

The Golden State has placed its chips on a new lottery director, Sharon Sharp. On Oct. 17, the former Illinois lottery chief proposed sweeping changes. For one, she wants to make tickets easier to buy. She plans to authorize new outlets such as video rental stores and banks, and she will install more ticket terminals. She also plans to expand the number of scratcher games, including ones based on blackjack and other gambling themes, now barred. And she wants to boost the maximum 50% of revenues that goes to scratcher prizes to offer higher jackpots and better odds.

Mainly, though, she must spur new interest in lotto, which contributes 63% of lottery sales. Former Director Chon Gutierrez had tried to pump up interest with bigger jackpots. But despite last April's $119 million prize--a national record--the steeper 1-in-23 million chance of winning turned off many players.

Next month, Sharp will make some specific recommendations. She warns that there are no quick fixes. "Once a lottery has declined," she says, "it's very difficult to turn it around." But if Sharp has her way, the California Lottery won't be the same old game for long.

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