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Monday, April 15, 2002

Ohio in new lottery as sales fall



By Brian Clark
Enquirer Columbus Bureau

        COLUMBUS — Ohio officials are betting Mega Millions will turn around five years of sagging lottery sales, but the experience in three border states shows a multistate lottery isn't necessarily a winning ticket.

        Lawmakers looking for more money gave the Ohio Lottery permission to join a multistate game late last year.

        The lottery chose the seven-state Big Game over its better-known competitor, Powerball, to help revive dismal sales that fell to $1.9 billion last year from $2.3 billion in 1997.

        On Wednesday Lottery officials announced a makeover for the Big Game, changing its name to Mega Millions. They also increased the odds of winning in hopes that jackpots will reach $400 million or more.

        But even as the state prepares for its inaugural drawing May 17, records show multistate lotteries in Michigan, Kentucky and Indiana are selling fewer tickets than they did two years ago.

        Michigan's Big Game sales dropped $29 million since 1999, a 16 percent decline. Kentucky's Powerball sales fell more than $20 million, while Indiana lost $56 million in Powerball sales in the same period.

        Lottery officials in those states blame their bad fortunes on “jackpot fatigue,” a condition in which people wait for larger jackpots before they place any bets. Michigan Lottery Acting Commissioner Jim Kipp said lotteries need increasingly bigger cash prizes to drive up excitement and ticket sales.

        Ohio Lottery officials predict Mega Millions should help the state collect $133 million more in sales next fiscal year, starting July 1.

        Of that amount, lottery officials expect to add $41 million to state revenues.

        Area lottery retailers say the infusion of Mega Millions will help them. Steve Goessling, owner of the Reading IGA at 9200 Reading Road, says when other states have mega-jackpots, Ohio Lottery sales are hurt.

        “I don't think there's any question that (joining Mega Millions) would be good for lottery sales and customers,” he said.

        Over time, even mega-jackpots begin to look small. Jack Ross, director of Indiana's Hoosier Lottery, says Powerball sales suffer from this now.

        “It used to be it was exciting when we got to $25 (million) or $30 million,” he said. “Now (sales are) much less definitive at those levels.”

        Anti-gambling groups argue the only way to keep interest in the lottery is to always have higher jackpots, and that means the games must be made more difficult to win.

        “Jackpot fatigue is nothing more than to condition people to not respond unless you juice up the jackpot by increasing the odds,” said the Rev. Tom Grey, executive director of the National Coalition Against Gambling Expansion. “In a sense, the government has manipulated peoples' behavior so they won't play unless there's that type of jackpot.”

        Ohio isn't the only state moving into a multistate lottery this year. Pennsylvania is joining Powerball and New York will help Ohio kick off Mega Millions.

        Lottery officials of the nine Mega Millions states announced changes to their game last week.

        The Mega Millions starting jackpot will be $10 million rather than the Big Game's $5 million and the odds were increased to make it more difficult to win.

        The odds of winning the Mega Millions jackpot are 1 in 135 million. That makes the Big Game look easy despite the high odds, 1 in 76.3 million. Powerball odds are 1 in 80 million.

        Lottery officials believe these changes will help Mega Millions jackpots grow larger, attracting new players and increasing sales. Mr.Rev. Grey has a different view.

        “It means more people lose so one person wins a lot more.” he said.

        Even after these changes, lottery officials acknowledge Mega Millions jackpots may eventually seem commonplace and jackpot fatigue will set in again.

        “As you begin to raise your players expectations, they become less and less excited,” Ms. Miller said.

        That means sales will decline again, leaving lottery officials looking for another way to renew interest.

        “We're always looking for new and innovative ways to raise money,” Indiana's Mr. Ross said. “That's our charge. So we didn't stop looking once we joined the multistate lottery.”

        Ms. Miller says she hopes interest doesn't wane in Mega Millions, but if it does and there's no way to revive it, “hopefully by that point in time there will be something we can replace it with or enhance it with.”

        Gambling opponents fear the same thing.

        “I think the people from Ohio need to understand you only get in deeper,” Mr. Rev. Grey said.

       



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