$20 lottery game unlikely to break even
By Bruce Mohl, Globe Staff | June 29, 2007
State Treasurer Timothy Cahill said yesterday that the lottery's $20 sweepstakes game is unlikely to break even, one of the rare instances when a game failed to pay for itself.
"We were really trying to a hit a home run," said Cahill, whose office, which oversees the lottery, launched the game in response to pressure from lawmakers to increase revenue before the fiscal year ends June 30. "We may not have been realistic trying to sell 4 million tickets, but this is far from a failure."
Lottery officials estimate 30 percent of the 4 million tickets printed for the game have been sold. Cahill said he expected the sales figure to climb over the next couple days to 1.5 million, or nearly 38 percent of the total.
The lottery needs to sell 2 million tickets to cover the tab for the $40 million in prizes. Cahill said the lottery may not reach that goal but could still end up selling more tickets for a single sweepstakes game than any other state.
Sweepstakes, sometimes called raffles, are delayed-gratification games. Players buy a ticket and hold on to it until a drawing is held. The lottery's Star Spangled Sweepstakes ticket went on sale May 1 and sales officially end tomorrow night , although Cahill said ticket sales at some retailers and lottery offices will continue through Tuesday. The prize drawing is Wednesday, July 4.
The lottery has pledged to pay out all the prize money even if all the tickets aren't sold. The game offers a $20 million top award, 10 $1 million prizes, and 40 prizes of $250,000 each. All prizes will be paid in lump sums rather than in installment payments.
Cahill said the odds of winning one of the 51 prizes in the sweepstakes would be 49,000 to 1 if 2 million tickets are ultimately sold. "In this business, those are tremendously good odds," Cahill said.
The odds of winning $250,000 in the lottery's $10 Red Sox instant game are 6 million to 1.
The lottery is one of the major sources of revenue for state aid to cities and towns. Last year, the lottery had its best year ever, with overall sales of $4.52 billion. State lawmakers this year set a target of a 2 percent increase in sales, but with just two days left in the fiscal year, sales are down 1.5 percent. Even with the slight downturn, the lottery's overall profit, which goes to cities and towns, should still exceed $900 million
Cahill said the lottery rushed out the sweepstakes game in a bid to bolster revenues and close the revenue gap. But officials at some stores selling lottery tickets have said consumers were uncomfortable with a game that required them to wait weeks until they found out if they were a winner.
Senator Michael W. Morrissey, a Democrat from Quincy who heads a legislative committee overseeing lottery operations, said he applauds lottery officials for trying something new.
"Every once in awhile you have to take a risk," Morrissey said. "In the end, I don't think this was the answer."
Cahill said lottery officials were overly optimistic about sales, expecting a state with 6.4 million residents to buy 4 million tickets. He also said the $300,000 budget for promoting the sweepstakes game was probably too small.
"It's new, it's different, and it's delayed gratification," Cahill said, explaining the marketing hurdles associated with the new game.
But Cahill said the state could set the record for sweepstakes sales if it sells more than 1.5 million tickets. The treasurer said a New York raffle earlier this year sold 1.5 million tickets using a $3 million promotional budget. A spokesman for the New York lottery pointed out that his state's raffle lasted only 23 days, not two months.
Cahill said the $20 sweepstakes helped boost overall sales at the lottery and is worth trying again.
"We're looking at doing two per year," he said.
Bruce Mohl can be reached at mohl@globe.com.
© Copyright 2007 The New York Times Company
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