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Sales spike as jackpot rises to $500 million

Fenwick Meats in the Cross Street Market stopped selling lottery tickets at the end of 2013 after 17 years.

"I had the feeling that the writing was on the wall. The sales were just down," said Henry Reisinger, Fenwick's longtime owner. The major jackpots, he said, are "few and far between."

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But that didn't stop him from urging market merchants and staff to join together to buy Powerball tickets last week as the jackpot reached near-record levels.

Even as lottery sales appear to be flagging in the state, Powerball still thrives when mega-prizes — like the $500 million jackpot estimated for today's drawing — prompt office pools and lure even the most logical and tight-fisted into the game. Who, after all, couldn't use roughly $224 million after taxes or wants to be left behind when everyone in the office pool quits?

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On Monday, the Maryland Lottery and Gaming Control Agency recorded $987,379 in Powerball sales, nearly five times the sales on Jan. 26, when the jackpot was estimated at $261 million. But such figures are a departure from slower sales over the last year, a lull without oversized awards.

Maryland Lottery sales have fallen roughly 2 percent for each of the past two years, a trend officials have attributed in part to the opening of the state's casinos, which increased competition for gambling dollars. Powerball sales fared even worse, plunging 20 percent to $105.4 million in fiscal 2014, which ended June 30.

"If Powerball had been flat, we would have been virtually flat last year as well," said Stephen Martino, director of the Maryland Lottery and Gaming Control Agency.

Officials attributed the dramatic fall-off in Powerball sales to "jackpot fatigue," with consumers blase about winnings that are anything less than eye-popping.

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Morrell Park resident Loretta Cheatham, for example, said she won't buy the $2 Powerball tickets until the jackpot hits at least $300 million.

"It certainly is true that 10 years ago people would get really excited over a $100 million jackpot, and now that phenomenon doesn't take place until it's more like $200 million," said Jeffrey Anderson, director of the Idaho lottery and current chair of the Powerball game group for the Multi-State Lottery Association. "I don't know why that would be other than to say that folks have a lot of options for their entertainment dollars."

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Powerball is played twice a week, with ticket holders hoping to match six numbers on balls drawn Wednesday and Saturday.

Jackpots start at $40 million and increase by $10 million or more, depending on sales, until there's a winner. The last major prize, a $425.3 million award, occurred in February 2014. First-place prizes have topped $200 million just a handful of times since, Anderson said.

The Multi-State Lottery Association, which runs the game on behalf of 44 states, Washington, Puerto Rico and the U.S. Virgin Islands, is exploring possible changes to Powerball, including offering larger jackpots by making the odds of winning even longer, Martino said.

Maryland also launched new instant games and tweaked the price structure for those offerings in hopes of boosting lottery sales, he said.

"As with everything — it doesn't matter if it's a lottery game — these things have to be looked at frequently," Martino said. "You just can't just sit it out there and expect that it's going to generate what it has in the past."

Martino's agency counts about 4,490 retailers selling lottery tickets in the state, with few signs that other vendors are following Reisinger's example.

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Reisinger himself said he thinks the lottery's sales will bounce back.

"I wouldn't worry about the lottery," he said. "It's a cycle."

Maryland began offering Powerball in 2010, when the Multi-State Lottery Association started cross-selling its tickets with Mega Millions in hopes of increasing jackpots and sales.

It worked. In May 2013, the $590.5 million prize won by a Florida resident set a Powerball record, eclipsing the $587 million record set in November 2012. The Mega Millions jackpot reached a record $656 million in March 2012.

Sales for both games climbed as jackpots soared.

But after reaching a $5.95 billion nationwide peak two years ago, Powerball sales fell to $4.81 billion in fiscal 2014, according to data from Mega Millions. In the first six months of fiscal 2015, nationwide sales were $1.69 billion, more than a third lower than the same period the year before.

Terry Rich, president of the North American Association of State and Provincial Lotteries, said his group urges states to budget for lottery revenue on multi-year rolling averages. Sales of games such as Powerball are unpredictable, but not in decline, he said.

"You get these highs and lows," he said. "On average, they're performing well."

Lottery officials expect the size of Wednesday's Powerball jackpot — the third largest since the game started in 1992 — to boost sales, despite odds that put a person's chances of winning at 175.2 million to one. (You're 250 times more likely to be struck by lightning this year.)

Maryland sales for Wednesday's drawing already had reached $1.68 million as of noon Tuesday, up from $550,664 during the same period last week, according to the Maryland Lottery and Gaming Control Agency. The Multi-State Lottery Association expects sales for this drawing to triple.

"There's no doubt sales spike when jackpots are high," Rich said. "This run is going to increase our totals immensely."

Tickets are available until 9:59 p.m. Wednesday. The drawing occurs at 11 p.m. in Florida.

For Cheatham, the possibility of Wednesday's winnings — a one-time cash take-home of about $224 million after taxes — proved irresistible.

"It starts getting big, I need some of that," said Cheatham, 50, who purchased four tickets Monday in anticipation of Wednesday night's drawing.

Two Maryland residents have won the Powerball jackpot since the game launched in the state, winning more than $100 million each.

Second-tier winners are more common. Already two Marylanders have taken home the $1 million prize this year.

If a Maryland resident wins the jackpot, the state would receive more than $29.6 million in tax revenue. The winner can receive a one-time cash payment or choose annual payments of $5.9 million over 30 years.

"I'd buy a new house and a new car," said Barbara Phillips, 68, of Morrell Park, as she ponied up $2 for a ticket Monday.

"Maybe you are the lucky one," said Paul Patel, an employee at the Morrell Park Deli, which was doing brisk Powerball business Monday afternoon.

"All right, give me two of them then," said Phillips, a retired supermarket worker. "It only takes one ticket."

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