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Tuesday, April 03, 2001
By John M.R. Bull, Post-Gazette Harrisburg Correspondent
HARRISBURG -- The state lottery is facing a projected deficit of $50 million in five years, so state officials are meeting with their counterparts in Ohio to talk about forming a merged jackpot game to boost revenues.
"The meeting with Ohio is very preliminary," cautioned Deb Snyder, spokesman for the state Department of Revenue, which oversees the state lottery. "This is not something that's going to turn over any time soon."
A meeting was held last month in Pittsburgh, and officials from both states are gathering tomorrow in Cleveland to continue discussions.
Ohio's lottery profit projections are stagnant. Pennsylvania's are worse, mostly because much of the state's profits are routed into subsidizing prescription drugs for the elderly in a program called PACE. Drug prices are skyrocketing and will put the lottery in a deficit within five years at current spending rates.
"The governor has been concerned for some time about our lottery gains, coupled with our allocations," said Steve Aaron, Gov. Tom Ridge's spokesman. "We asked the lottery people to look at the situation and make recommendations. We anxiously await their recommendations."
While there has been talk in Harrisburg for years about the idea of joining with another state to offer a joint jackpot gain, little has come of it.
This time, however, routine talks with other states led to a meeting between Ohio and Pennsylvania lottery officials, and it went well enough to schedule another one for tomorrow, state lottery officials said.
"This is so preliminary," said lottery spokeswoman Sally Danyluk. "We don't even know what game it could be, and if they'd want to do it and if they could do it. They would need an act of their legislature."
The thinking is that a combined jackpot game, like Powerball or The Big Game, would mean payoffs as much as $250 million, which could spur more people to play in Ohio and all of Pennsylvania's lottery games, boosting revenues enough to cover how much the state spends on prescription drugs for the elderly.
Bigger jackpots may attract fringe players, the ones who play once in a while or the ones who will gather in a group to play in hopes of hitting the big win.
Then again, a combined jackpot game may not spark enough interest to make it worthwhile, said Snyder. Focus groups of longtime state lottery players say that while they like the idea of a big payoff, they really like the idea the payoff is going to someone in the state, she said.
Snyder said one of the unknown factors was whether those players would be as enthusiastic if the winner were someone in Ohio.
While state officials say there is no urgency in the talks with Ohio, there is another financial blow looming on the lottery's horizon.
The state's Super 6 game, which features drawings on Saturdays and Wednesdays and has a current jackpot of $17 million, has been losing its luster with players so much that the game will be discontinued at the end of the year.
"It's a game that has run its course, as happens with lottery games," Snyder said. "It's been successful but it's lost its appeal."
The lottery saw sales of $1.7 billion in tickets last year and estimates a modest 2 percent growth next year. Expenditures, however, are soaring.
Pennsylvania spends its lottery profits on senior citizens, in the form of rent assistance, free mass transit, shared ride programs and prescription drugs.
The $260 million spent on the prescription drug program for senior citizens last year is estimated to balloon to $360 million next year.
Ohio spends its lottery profits on schools and also has a stagnant growth rate in its lottery program.
A combined jackpot game has "positives for both sides," Snyder said.