MD State lottery sales increase to $1.6B

Sunday, September 03, 2006 posted 02:14 AM EDT

FREDERICK -- If Tyrone Weedon wins the Pick 4 lottery this weekend, he plans to buy tickets to the next Pittsburgh Steelers game.

Mr. Weedon, 42, is a lifelong Frederick resident and makes his money working for Wells Fargo Home Mortgage. But he also hopes to one day make big money playing the lotto.

"I just play for beer money," he said while waiting for a lottery ticket at Hillcrest Wine Spirit & Deli on Thursday. "But when it comes around big, it's nice, and it comes around when you least expect it."

Mr. Weedon adds to the more than 32 million state lottery purchases Frederick County residents are expected to make this fiscal year.

In fiscal 2006, which ended in June, lottery sales totaled about $1.6 billion, according to the Maryland State Lottery Agency. Sales are up almost $200 million from fiscal year 2005.

About $54 million went to operating expenses. Retailers earn commissions of 5.5 percent on sales and 3 percent on tickets cashed at their business, which totaled $102 million in fiscal 2006.

About 57 percent of fiscal 2006 lottery sales, nearly $903 million, was paid to lottery winners.

The most money Mr. Weedon has won playing the Maryland lottery was $2,700, which he used take a vacation to Myrtle Beach about nine years ago.

About a third of lottery sales, $501 million, went to state-funded programs, such as heath care, libraries and public schools. Money earned by the lottery agency made up about 16 percent of Maryland's general fund, roughly $26 billion in fiscal 2006.

Frederick County impact

For fiscal 2006, Frederick County received $184 million in direct state aid, according to the state Department of Legislative Services. The county will receive about $205 million in fiscal year 2007.

Frederick County Commissioner Bruce Reeder, who also serves as a Maryland State Lottery commissioner, said the lottery is important to help finance state and county programs. Lottery money is the third-highest source of revenue for Maryland; state income tax and state sales tax compete every year for the top two, he said.

Mr. Reeder expects Frederick County residents to spend $135 million in lottery-related purchases this year.

A 1992 gaming ordinance passed in Frederick County allows nonprofit organizations to apply for permits for fundraisers, such as bingos and tip jars. That brings about $35 million to the state each year, Mr. Reeder said.

Another $40 million is generated by off-track betting, such as at The Cracked Claw Restaurant at Peter Pan and Sports Palace in Frederick.

Owner Johnny Poole said the commission his business earns from the betting helps the bottom line, but it doesn't compare to the appetite of the 200 people who bet on horse races there every day.

"Two of our three rooms are full all day long, and they're all eating," he said. "The average age of our bettors is around 6

5, and they're as quiet as a church mouse. They're not yelling like you see at the track; they just eat and read their programs."

The rest of the revenue, about $60 million, comes from lottery ticket sales, Mr. Reeder said.

Pros and cons

Mr. Reeder enjoyed playing the lottery before he became a lottery commissioner but never won a big prize. Now he visits Charles Town, W. Va. to play the slots -- but strictly for recreation, he said.

"If people want to play the lotto, make off-track bets or go play the slots, that's up to them," Mr. Reeder said. "The government cannot regulate how people can spend their money, but some people do abuse it."

Carole Everett, spokeswoman for the Maryland State Lottery Agency, said the entertainment value keeps people coming back for more, but the agency wants people to "play responsibly."

"There are always going to be a few people who have addiction issues, but our focus is on entertainment, having fun and enjoying the game," she said.

The agency works with the National Council on Problem Gambling to combat gambling addiction.

Ms. Everett said problem gambling is more often associated with casino gambling than playing the lottery. For that reason, if slot machines were allowed in Maryland, Gov. Robert Ehrlich has proposed a program to address problem gambling.

Under the proposal, money earned from slots would help people with gambling addiction.

While Ms. Everett recognizes gambling addiction could be a problem for some players, the money helps the state's residents.

"More money for the state means more opportunity for programs," she said. "It's a wonderful revenue source for the state. The players win, and retailers earn more than $100 million. It's a win-win-win situation, no matter how you look at it."

Sudesh Gupta, owner of Hillcrest Wine Spirit & Deli, wins when a player cashes a winning ticket or if the jackpot grows. He said the commissions his store earns from cashing winning lottery tickets may not pay the rent, but high jackpots boost sales of other items.

"During those times, you see a lot of people come from office pools," he said. "Overall, sales go up because it's based on traffic."

Mr. Gupta said sales double when the lotto jackpot reaches $100 million and triple when it hits $200 million.

"For some people, it's an addiction, but most people play mostly out of hope," he said. "One dollar isn't going to affect people's life, so it's all about risk and reward."

Dressed in a yellow Steelers T-shirt, Mr. Weedon handed over $8 to play his favorite numbers at Hillcrest Wine Spirit & Deli. He's used the same numbers for more than five years -- his house number, which he picked when he moved into his home.

"These are the numbers you see every day, and you have a hunch they might win you something," he said.

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