Lottery sales sagging

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After a booming year of jackpots and record sales last year, state officials project a $32 million drop in net proceeds for the current fiscal year, citing rising gas prices and lower Powerball jackpots.

The state Board of Economic Advisors estimates the lottery will deliver $255 million in net proceeds to the state from the current fiscal year's sales, compared to $287 million in net proceeds generated in the last fiscal year.

Dennis Jones of Simpsonville said he usually buys three lottery tickets a week, but with rising gas prices, "You just have so much to spend."

But Caton "Bodacious" Easterling, president of Sterling Advertising & Marketing in Greenville, said he continues to pay $1 for a lottery ticket every week so sales "shouldn't be lagging."

Officials say sales from July through October are running about $4 million behind the same period last year.

Any drop in lottery proceeds will mean less money for education.

Lawmakers this year appropriated $340 million for education using lottery funds, including the $255 million projected amount and a surplus from the year before.

About $160 million in lottery money is budgeted for college scholarships, grants and tuition assistance.

Another $100 million was appropriated for K-12 education, including $46.5 million for elementary math, science, reading and social studies programs; almost $7 million for homework centers; $4.8 million for textbooks; and $1 million for the Governor's School for the Arts in Greenville.

Chuck Harvell, 63 of Greenville, and William Rucker, 52, of Greenville, said they have contributed to the education lottery since its start in South Carolina.

Harvell, "a transportation engineer," said he's yet to win $1 on any of the lotteries he's played in eight states. He still buys three tickets a week — two Powerball and one Carolina Five.

"If I don't have a ticket, I can't win. My wife said, 'You're never going to win.' I said, 'Without at least one ticket you never are going to win.' So I buy a ticket and I daydream," Harvell said.

Rucker, a furnace operator at General Electric, said he's actually buying more tickets than he has in the past because "I've been hitting more. You hit more, you can buy more. You hit less, you can't buy none."

Ernie Passailaigue, executive director of the South Carolina Education Lottery, said although sales have dipped some, he remains optimistic.

Lottery officials, he said, have projected proceeds of $277 million, $22 million more than the state's economic advisors.

"We think we are certainly going to meet the BEA estimate of $255 million, and we have a good shot at meeting $277 million," he said.

Many games are selling above last year's levels, but overall revenue has been hurt by a dip in Powerball sales, he said. Lottery sales, he said, have been affected somewhat by rising gas sales.

About 90 percent of the state's lottery tickets are sold at convenience stores with gas pumps. The average price of gas in the state was $1.10 a gallon when the lottery started four years ago, he said, and is now about $2 per gallon.

"The consumer at the pump at where we sell tickets has less disposable income to spend," he said." This is something we can't control."

It also means that some North Carolina residents who used to drive 60 miles round trip to play the Powerball aren't so easily lured any more because of the added expense, he said. About 12 percent of tickets sold are bought by North Carolina residents, he said.

But Passailaigue said he believes the biggest reason behind lagging sales has been the less-than-giant jackpots offered since July. The previous year saw three large Powerball jackpots, he said, generating huge sales.

"On the first Wednesday of July in 2003, we were selling Powerball jackpot tickets in South Carolina at 15,200 tickets a minute," he said. "We sold over $6 million in Powerball tickets in one day. We haven't had a jackpot run like that, quite frankly, in awhile."

Smaller jackpots draw fewer players, he said, the result of what lottery officials call "lottery fatigue."

"People are not playing at the rate they played in the past and I think one of the reasons is it is just going to take a larger jackpot to get off the couch, crank up the SUV and drive 60 miles round trip to buy lottery tickets."

Quincy Turman, 29, of Greenville, said every time money in the Powerball jackpot rises, "I buy more tickets."

And rising gas prices probably won't affect his purchases of lottery tickets. "I'll just buy cheaper gas," Turman said.

Harvell said lottery ticket sales may be lagging simply "because people like me don't spend a lot of money on them. I'm not going to put the lottery before food on my table, or health of my wife or my animals.

"I wouldn't go out here and blow money. I'll spend $1 for one ticket and that's it. Win or lose, I'm not going to lose that much."

And regardless of what the gas price becomes, "I'm going to buy my $1 ticket and hope," Harvell said.

Easterling said if the choice comes down to gas or a lottery ticket, "My clients are in two or three states, so I've got to be on the road. I definitely have to have gasoline, just like I have to have blood to pump in my heart."

Some lawmakers and education officials had cautioned the state against developing an addiction to lottery money.

"Educators have always worried about relying on such an unstable revenue source to support day-to-day school operations," said Jim Foster, a spokesman for the State Department of Education.

"Schools certainly hope that projection is off the mark."

Sen. Mike Fair, a Greenville Republican who sits on the Senate Education Committee, said lottery sales eventually plateau and the Legislature shouldn't expect huge proceeds every year. He said he doesn't expect any dip to affect primary and secondary schools but may impact scholarships and grants.

Despite the reduced sales, Passailaigue said it will only take another big jackpot to make sales "healthy" again. Even without them, he said he expects proceeds to total $120 million for the first five months of the fiscal year, which would put the state on track to reach the BEA goal, if not more.

In the meantime, Danielle Andre, a store manager at Red Robin convenience store, said she helped sell more than 2,000 tickets within four hours last week.

"We do pretty good," she said, adding that the store is consistently among the top retailers in lottery sales regardless of the price of gas.