Lottery fever not as high as you think as state revenues slip from recession strain
Wake up and good morning. One of this week's big lottery winners in this country is the couple above, Jim and Carolyn McCullar of Ephrata, Wash. (AP photo), who claimed half of the $380 million prize. It's the second largest jackpot in history. The photo and hype seems to be a reminder that there's big bucks to be had by playing -- somebody has to win, right? -- and the lottery system in America is alive and well.
A closer look at the health of the lottery system, whose income is used by states to fund spending and meet their budgets, shows some strains. Nationwide, income from lottery-ticket sales in fiscal year 2009 fell to $52.3 billion. That's a 0.9 percent drop from the previous year, Census Bureau data show. It was the first decline since 1998 and cut profits by $511 million from a year earlier to $17.7 billion, leaving states with less cash to balance budgets and aid cities and towns.
Florida was hit harder. According to Bloomberg News, census bureau show numbers our foreclosure-wracked state saw revenue drop 5.5 percent, from 2008, to $3.7 billion. The story -- read it here -- touches on the myth that lottery revenues are recession proof and indicates that when unemployment rates approach 10 percent (Florida's was 12 percent in November, the most recent figure available), people start cutting back on lottery purchases.
The good news? Florida is not Arizona. That state decided to borrow against its lottery to get cash up front to try offset a deficit that the Center on Budget and Policy Priorities said equaled 37 percent of its state budget. The state, which also sold off buildings in the Capitol complex, raised $425 million by issuing bonds that will be paid back with lottery proceeds, says the Bloomberg story.
The potentially bad news? Florida's about to endorse more gambling-style activities in the state anyway. Gov. Rick Scott said Thursday he is open to allowing Las Vegas-style casino resorts in Florida, opening the door for promoters to move swiftly ahead with legislation this year that would end the decades-old ban on the high stakes games. Read more here in the St. Petersburg Times.
Slippery slope, that gambling stuff. We're opening the door wider, quickly.
-- Robert Trigaux, Times Business Columnist