Ky Lottery sales hit record $810.5 million

LOUISVILLE -- (AP) -- Kentucky's lottery defied the odds of a reeling economy, posting record sales amounting to its heftiest contribution ever to the state treasury.

It was the fourth straight year that lottery sales — an important revenue source for Kentucky higher education, especially scholarships — set a state record. The strong sales came as the state dealt with a seasonally adjusted unemployment rate of 10.9 percent in June.

In the fiscal year ending June 30, Kentucky lottery sales totaled $810.5 million, beating the previous year's record level by $32.3 million, or 4.2 percent, lottery officials said Friday.

The lottery transferred $204.4 million to the state for the full year, up from $192.1 million the previous year and barely ahead of the then-record amount contributed to the state earlier in the decade.

Scratch-off tickets ranging from $1 to $20 set the pace with a 7 percent sales increase to reach $504.1 million, Kentucky Lottery Corp. president and CEO Arch Gleason said.

Gleason said the latest figures indicate that adults who play the lottery spend $10 to $15 a week on lottery tickets — comparable to average amounts in recent years.

"Lottery sales historically have been a bit more resilient in economic downturns than the general economy," Gleason said in a phone interview.

The lottery's strength amid a recession indicates some people see the games of chance as "a way to cope," said John Vahaly, chairman of the University of Louisville's economics department.

"The increase in demand is just sort of coming from people's attempts to try to make a bad situation better," Vahaly said by phone.

Lottery sales of $810.5 million included $45.5 million in free tickets awarded as prizes for scratch-off games, lottery officials said. Actual cash sales totaled $765 million for the fiscal year, down slightly from $778 million in cash sales the previous year.

Free scratch-off tickets replaced the lowest-end prizes, which equaled the ticket's purchase price. The lottery did away with those small cash prizes because it found players tended to ask for another ticket instead of the cash.

Online game sales increased slightly, to $292.2 million in the just-ended fiscal year, led by gains in the daily Pick 3 and Pick 4 games. Powerball sales fell 1.5 percent, to $96.9 million.

Retailers also benefited from higher overall sales, receiving a record $50.2 million in commissions and incentives. The lottery's operating expenses for the year totaled $33.1 million, or 4.3 percent of sales.

The lottery's record contribution to the state treasury comes as lawmakers have struggled to keep the state budget balanced amid the sluggish economy.

The first $3 million of lottery proceeds to the state goes to literacy programs.

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