Education is Tennessee Lottery's top winner

Education is Tennessee Lottery's top winner
Tickets first went on sale 5 years ago

By Lucas L. Johnson II • ASSOCIATED PRESS • January 20, 2009

Lottery Strategies

The Tennessee Lottery has generated more than $1.3 billion for education programs since its inception five years ago, and officials are hoping that number will continue to grow despite a tight economy.

Today marks the fifth anniversary of the state lottery, which began selling scratch-off tickets on Jan. 20, 2004.
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Since then, the program has had nearly $5 billion in sales, and about $3 billion in prizes have been paid to winners, lottery spokeswoman Kym Gerlock said. However, the biggest beneficiary has been education.

Last year, Gerlock said lottery funds helped more than 68,000 students at statewide higher education institutions and about 10,000 students in dual enrollment classes, helped fund 257 new pre-K classes and provided grants to 126 after-school programs. Tennessee lottery funds are dedicated by statute to those facets of education.

Overall, Gerlock said more than 100,000 individuals benefit each year from lottery-funded education programs.

"The more students who can be impacted by the dollars we raise, the more successful we'll be," said lottery CEO Rebecca Paul Hargrove.

Democratic Gov. Phil Bredesen, a strong advocate of education programs, said he's pleased with the assistance the state lottery has provided — particularly for the state's best students.

"I think it's been successful and helped a lot of people go to college," he said. "I think it's done a really good job of keeping a bunch of really good students home in Tennessee institutions."

At some point, however, the governor said he would like to see more lottery funds made available to help "the non-3.0 students, which is where I think a lot of the new students are going to come from."
Not all smooth sailing

Despite its success, the lottery has had a few troubles. In October, lottery officials filed a lawsuit against Smartplay International Inc. and Gaming Laboratories International Inc., the technology provider and system reviewer held responsible for a programming glitch.

The error caused no duplicate digits to appear in winning Cash 3 and Cash 4 numbers between July 28 and Aug. 20 of 2008. Gamblers who picked duplicate digits could not win.

Then in November, Hargrove told Bredesen in budget sessions that lottery sales were running about $400,000 less per week than in 2007 and that the lottery was now projecting about $288.6 million in revenues for education this fiscal year.

That's about $2.5 million more than 2007, but about $3.5 million less than earlier estimates.

She said at the time that Powerball sales had been coming in lower because the game's jackpots had been smaller than the previous year.

Officials say they don't know whether the tough economic times are driving the decrease in sales. Some researchers say financial insecurity might actually encourage people to risk more of their money than usual on $1 and $5 instant scratch-offs and other daily games in hopes of a big payoff.
25 win $1M or more

Hargrove said there isn't much evidence to support a prediction, because the nation hasn't seen an economy like this since the Great Depression — an era when there were no legal lotteries in the United States.

However, she said data from recessions since 1964 show they haven't driven lottery ticket sales up or down.

"In recessionary times, you put off buying the refrigerator or the new car, but your $1 lottery ticket isn't something that you give up," Hargrove said.

Since the lottery began, she said retailers have earned nearly $320 million in commissions, and 25 people have won a million dollars or more.

Shannon Rebello, a manager at a Nashville Mapco convenience store, said every other customer spends at least $2 on lottery tickets. And Darlene Harper, a Mapco manager at another Nashville location, said she sells about $300 worth of lottery tickets daily.

Kenny Stinnett, 39, a construction worker in Knoxville, said the economy hasn't affected whether he buys the tickets or how often. He said he buys the scratch-off tickets "every once in a while."

"Just when I have a couple of extra dollars," he said. "Sometimes I wish I'd win the $100,000. I'd buy a house and a new car ... but I'd keep playing."