Sanford asks S.C. Education Lottery to make small cuts

COLUMBIA, S.C. -- Gov. Mark Sanford says he doesn't approve of a state lottery but since it's here, it should be as efficient as possible.

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Sanford said in a budget hearing Wednesday that he'd like the South Carolina Education Lottery to cut its retailer commissions and put even more money toward education.

The lottery has had about $1.2 billion in gross sales from the beginning of the games on Jan. 7, 2002 to Aug. 31, 2003.

About 7 percent of that goes toward retailer commissions. Sanford recommended the commission be lowered to about 5 percent.

The 7 percent commission, which was set by the General Assembly, is an incentive for retailers to sell and to perform some banking services by paying out small amounts on winning tickets, said Education Lottery Executive Director Ernie Passailaigue. A lower commission could turn some businesses away from selling tickets, he said.

Sanford also expressed concern about the lottery's $6.8 million advertising budget.

The state Department of Parks, Recreation and Tourism spends less money - about $4.5 million - promoting South Carolina to other states than the lottery spends promoting the games to its own residents, Sanford said.

Passailaigue said the lottery must promote its products, especially through point of sale advertising - ads placed near cash registers and at lottery machines in stores.

However, the lottery has made efforts to reduce its advertising budget by doing more of its advertising in-house, Passailaigue said.

The governor suggested other means to make small cuts, such as recruiting volunteers rather than paying $60,000 for the salaries of people who host the evening drawings.

Overall, Sanford wants to see more of the lottery's gross proceeds go toward education. Of the $1.2 billion in gross sales, about 29 percent goes toward education, while the rest goes toward prizes, contracts and administration and retailer commissions.

State law requires at least 45 percent go toward prizes paid out. If the amount of prizes changes, that will have an impact on the total gross sales, Passailaigue said.

Meanwhile, the lottery is considering some changes. The commission is exploring the possibility of joining the multistate Lotto South game. Currently, Kentucky, Georgia and Virginia are members. One problem is that the game, which has jackpots that begin at $2 million and average $10 million, has a drawing on the same day as the Powerball game.

The lottery also may increase the number of Carolina 5 drawings from two to three times a week and may move that drawing from 11 p.m. to 6:59 p.m., said Pat Koop, the lottery's sales and marketing director.

--From the Thursday, October 2, 2003 online edition of the Augusta Chronicle