Many of you have complained that the lottery is giving a smaller slice of the pie to HOPE and pre-k than was originally intended and urged the AJC to write about it.
The paper has a good story today on the issue of why the lottery is returning less than the third that voters approved in the statewide referendum that legalized lottery sales in Georgia. In a nutshell, the lottery officials maintain that new games and more prizes attract more players and the cite Georgia Lottery sales and earnings as their evidence.
The AJC reports that a state audit found the Georgia Lottery is fifth-highest among 42 lotteries in the nation for jackpots and still ranked seventh in total money transferred to the state because it had maintained high overall sales. The auditors found the correlation between the higher or more-frequent jackpots and better sales benefited the lottery-funded programs.
Last fiscal year, just 26.1 percent of lottery money went to the reason voters approved state-sanctioned gaming in the first place.
The fluctuation occurs because the law authorizing the lottery has a fudge factor. The statute states that net proceeds of the lottery should be 35 percent of gross revenue “as nearly as practical.”
“The reason they put 35 percent in the original bill is that they thought that’s what they needed to tell people in order to pass it in Georgia,” said state Sen. Jason Carter, D-Decatur.
Earlier this month the freshman senator offered an amendment to the HOPE scholarship bill to gradually increase the percentage of lottery money to the state to 30 percent by 2015.
“That’s the promise that we made as a state and that the people of Georgia accepted when they allowed the lottery,” he told his fellow senators.
The amendment was defeated 35-20 in a party-line vote. Carter was not surprised since legislative leaders had been told that cutting the percentage of money going to prizes would ultimately hurt revenue by decreasing the popularity of the games.
Officials with the Georgia Lottery Corp., the quasi-governmental entity that runs the game, would not comment on the amendment.
Instead, they provided a “fact sheet” supporting higher jackpots, especially on scratch-off or “instant” games. Lower payouts would cut into overall revenue as customers fall away, the lottery claims.
Richard McGowan, a Boston College economics professor who has written critically about state lotteries, said there is something to the argument. Lotteries have life cycles, and Georgia’s mature game needs to reward gamers to keep their interest, he said.
Criag Lutton of Peachtree Corners has one child at the University of Georgia on HOPE and another who is a high school junior. He said he can see both sides of the argument, although he is not entirely convinced more money could not be shifted to education. “I don’t think that lottery buyers have any idea how much money goes into jackpots,” he said.
A state audit of the lottery released just before the HOPE vote in the Senate offers further evidence that less is more. The audit found the Georgia Lottery is fifth-highest among 42 lotteries in the nation for jackpots and still ranked seventh in total money transferred to the state because it had maintained high overall sales.
The auditors found the correlation between the higher or more-frequent jackpots and better sales benefited the lottery-funded programs.
–Maureen Downey, for the AJC Get Schooled blog