Maryland Lottery reports $1.8 billion in sales last year

Despite a sluggish economy that has many consumers pinching pennies, Marylanders are still willing to pony up a buck for a chance to win big.

For the 15th consecutive year, the Maryland Lottery reported an increase in ticket sales, pumping more money than ever into the state treasury.

Maryland sold $1.795 billion in lottery tickets during fiscal 2012 — $80.4 million more than the prior year, the state lottery agency announced Monday. The lottery contributed $556 million to the state's operations, 7 percent more than last year, and was the state's fourth-largest source of revenue, after sales, income and corporate taxes.

People like Shonae Mackall helped fuel such returns for the state.

"I might buy a scratch-off every now and again," said Mackall, who bought a bingo scratch-off late Monday at the 7-Twelve Convenience Store and Tobacco Shop in Mount Vernon while on break from her job at the Central Booking and Intake Center. "I haven't had much luck with it."

Still she said she plays "just for fun" about once a week.

"The record and sales increase is a culmination of a lot of different things," said Stephen Martino, the Maryland Lottery's director.

Chief among the reasons for sustained growth, Martino said, are the diversity of gambling options offered by Maryland, from scratch-off instant tickets to jackpot games, and the strength of the Lottery's retail network.

The stagnant economy both hurts and helps, said Melissa Kearney, an associate professor of economics at the University of Maryland, College Park, who has studied lotteries.

People in general are more likely to spend money on the lottery when times are good, Kearney said. But lower-income people or those who have lost an income are more likely to play when the economy is suffering. That's because they often feel as if the lottery is their only means of quickly accumulating money, she said.

"When people have experienced a loss of income, they do gamble more," she said.

And for the lucky few, it pays off. Players were paid more than $1.066 billion during the Lottery's 2012 fiscal year, which ended June 30.

Different lottery games appeal to different segments of the population, Kearney said. Instant tickets are favored by lower-income people with less education, while jackpot tickets are preferred by more educated, higher income individuals, she said.

The Maryland Lottery saw gains across all its game segments during the fiscal year. No single family of game makes up more than a third of the lottery's revenue.

Monitor games had the largest share of lottery sales, about 29 percent. Those games, which are played by watching a screen that refreshes every few minutes, brought in $521.7 million, almost $25 million more than last fiscal year.

The state's daily draw games, Pick 3 and Pick 4, brought in nearly the same amount as the monitor games, $520.1 million.

People spent slightly less — $506.8 million — on the state's scores of different scratch-off tickets, which can be purchased for amounts varying from $1 to $20 and have top prizes that range from $500 to $1 million.

Jackpot games, which often get the most attention because of their multimillion-dollar drawings, hauled in the least: $246.3 million.

Maryland's consistent network of 4,200 retailers also helped maintain growth, Martino said. Lottery retailers earned commissions totaling $118.3 million last year, according to the Lottery.

A program called "Sales Maker" helped about 100 lottery retailers renovate their lottery sales areas to keep them attractive and usable for consumers, he said.

The lottery spends about 3 percent of its revenue on operations. Established in 1973, it has contributed more than $12.8 billion to the state. Most of the money goes to the general fund, which pays for education, public safety, transportation and other initiatives.

Headquartered in Southwest Baltimore, the Maryland Lottery recently reorganized its sales and marketing operations, making them more efficient and effective, Martino said.

The team has done more to push the Maryland Lottery's online presence, through social media sites like Facebook and YouTube, he said. Marketing lottery games in partnership with the Ravens and Orioles sports franchises also has been a boon, Martino said.

March's $656 million Mega Millions jackpot, shared by the owners of three winning tickets, certainly didn't hurt sales either, Martino said. A ticket sold at a 7-Eleven on Liberty Road in Baltimore County was one of the jackpot winners and went to a trio of public school teachers who wished to stay anonymous.

The historic prize helped push sales up prior to the drawing, and the sustained storyline of a local winning ticket — the educators didn't cash in their ticket for more than a week after the winning numbers were selected — kept the public's focus on the Lottery afterward, he said. That helped avoid the normal drop in sales that occurs after a jackpot winner is drawn and the pool of winnings shrinks, Martino said.

But even before the Mega Millions excitement of early April, ticket sales were on track to exceed last year, Martino said.

Although the state now has more than 5,000 slot machines and electronic table games at three locations, also overseen by Maryland Lottery, the accessibility of such casino gaming has had no noticeable influence on lottery ticket sales, according to the agency.

Lower gas prices and an improved economy certainly played a part in the increase, Martino said. And as much as he'd like to toot his own horn, he said, lotteries across the country seem to be doing well.

Revenue for the multistate jackpot game Powerball increased 35 percent from fiscal 2011 to fiscal 2012, in part because the ticket price doubled to $2 at the beginning of the year, said Charles Strutt, executive director of the Multi-State Lottery Association, which facilitates Powerball in more than two dozen states and territories. Sales across the states have been strong, he said.

David Gale, executive director for the North American Association of State and Provincial Lotteries, said that the organization is currently collecting sales figures from its members for the latest fiscal year. "I am seeing and hearing that several of the lotteries have had an increase in sales," he said.

As in Maryland, the sales increases are not isolated to a single type of game, he said. Although the Mega Millions record jackpot helped sales, Gale said, instant sales are up as well.

"Also impacting sales is good management," Gale said. "Lotteries are no different than a Coke or Pepsi. They must fight for space in a retail store, they must advertise and promote their games and educate players, and they must continue to explore new game designs and delivery options to the players."



Maryland Lottery sales by game, fiscal 2012

Monitor games (Keno, Racetrax): $521.7 million

Daily draw games (Pick 3, Pick 4): $520.1 million

Instant games (scratch-offs): $506.8 million

Multistate jackpot games (Mega Millions, Powerball): $193.7 million

Maryland-only jackpot games (Bonus Match 5, Multi-Match): $52.6 million

Source: Maryland Lottery