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Lottery: Mega Millions' effect minimal: No sales boom during game's first month In state
Mar 08, 2010 (The State - McClatchy-Tribune Information Services via COMTEX) --
It's early yet, but the multistate lottery game Mega Millions has not sent lottery ticket sales shooting through the roof in South Carolina.
Overall, sales are up about 3 percent. But sales for the state's other multistate game -- Powerball -- are down.
For roughly its first month of operation in South Carolina, the Mega Millions jackpot game had sales of $2.3 million, according to state lottery figures, as South Carolinians got their first crack at a second, high-sweepstakes game.
For roughly that same one-month period -- Jan. 31 to Feb. 20 -- Powerball had sales of just over $6 million. That's down $1.1 million from the same period last year.
Mega Millions ticket sales began in the Palmetto State Jan. 31, joining Powerball, which has been a fixture since the lottery's inception in 2001.
Paula Harper Bethea, South Carolina Education Lottery executive director, said she's not worried that Mega Millions is siphoning off Powerball business.
"We don't see any cannibalization of Powerball," Bethea said.
Still, for the opening 21 days of Mega Millions sales in the state, Powerball sales dipped.
Several factors could be responsible, Bethea said, including a struggling economy and a couple of weeks of extremely cold weather in February.
Total lottery sales in 2009 were $1.017 billion, Bethea said, and it is still too early to establish trends in the state's lottery sales habits with Mega Millions now on board.
"We're basically tracking about where we were last year," Bethea said. Total lottery sales last year from Jan. 1 to Feb. 20, when Mega Millions was not available in the state, were approximately $149 million.
In 2010, with Mega Millions available for roughly half the period from Jan. 1 to Feb. 20, total lottery sales were about $154.5 million.
One shift that ticket sales may be showing in the state is a greater proclivity among buyers to purchase the big jackpot tickets for Mega Millions and Powerball games, as opposed to the instant scratch-offs, Bethea said.
The lottery receives a bigger profit from the online Mega Millions and Powerball games than it does from instant games, Bethea said, so transfers to the state for education expenditures are higher when online sales go up.
Bethea said in November, when lottery commissioners approved the addition of Mega Millions, the state could net at least $15 million to $22 million a year.
Lottery officials said one of their initial hopes in adding a second major jackpot game to the state's lottery lineup was to keep dollars in the state that might otherwise cross over to neighboring Georgia to play Mega Millions.
"That was one of the issues on the front end going in," said Tim Madden, lottery commission chairman. "Another factor was that everybody (meaning all lottery states) were of the same mind-set, that having two jackpot games is better than having one."
A second jackpot provides a better balance in serving the game's demographic, Madden said, noting that when one jackpot or the other rises significantly, players tend to migrate to the higher-jackpot game.
When a jackpot is won, Mega Millions resets to $12 million, while Powerball resets to $20 million.
South Carolina operates one of the most profitable lotteries in the world, statistics show, with the games turning their 2 billionth dollar over to education last year. The South Carolina lottery also has an enviously low administration cost, consuming about 1.5 percent for internal operations, officials said.
Proceeds from the games are used to fund college scholarships and K-12 education.
Officials also have said that, long-range, they do not expect to experience a great increase in the amount of sales the lottery has achieved, roughly $1 billion a year since 2001.
"We're excited about having a second jackpot," Madden said, noting that any trends would become more apparent in six months to a year. "We have no concerns about where we are now."
Reach Burris at (803) 771-8398.
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http://www.thestate.com. Copyright (c) 2010, The State, Columbia, S.C.
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