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Will sluggish economy cut into record Iowa Lottery income?

Thursday, July 31, 2008

The Iowa Lottery on Tuesday reported record sales of nearly $250 million in the last fiscal year, but a slowing economy and flooding were blamed for a spring drop-off in sales.

The $249.2 million in sales of instant-scratch tickets, lotto games such as Powerball and pull-tab tickets was the highest figure since the lottery began in 1985, excluding the period when the lottery operated Touchplay video games. The 2008 sales were 6 percent above the previous year.

The lottery sales generated more than $57 million for state programs during the fiscal year that ended June 30. That's a drop of 1.6 percent from the previous year's profit due to a greater percentage of instant-scratch tickets that have smaller profit margins than lotto games.

Although the numbers look strong, sales dropped significantly in the final months of the fiscal year, especially in June.

Iowa Lottery Vice President Mary Neubauer said that by last September, sales were ahead of the previous year by 18 percent. But as the economy slowed, so did lottery sales.

"Lottery sales are impacted by things like fuel and food prices," said Neubauer, lumping in lottery sales with other discretionary expenses such as candy.

Then came the spring's tornadoes and flooding that prompted Gov. Chet Culver to issue disaster proclamations for 86 counties.

In addition to those forced from their homes, the chaotic weather caused many people to make minor changes in their days, such as putting off a stop at a gas station or convenience store. That hurts lottery sales, Neubauer said.

"It takes people out of their normal habits, out of their normal routine," she said.

Neubauer said sales in the first couple weeks of the 2009 fiscal year are below last year's level. Lottery officials will try to boost sales through promotions and offering a variety of games, "but there's only so much you can do because people only have so much discretionary income," she said.

One disappointment of the year was in sales of "Iowa's Million Dollar Raffle," the lottery's first raffle. Customers bought about 71,000 tickets.

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