Missouri Lottery plans play-at-the-pump, ATM sales

2013-05-31T07:45:00Z 2013-09-17T06:49:09Z Missouri Lottery plans play-at-the-pump, ATM salesBy Elizabeth Crisp ecrisp@post-dispatch.com 573-635-6178 stltoday.com

JEFFERSON CITY • Missourians will soon be able to electronically purchase Powerball and Mega Millions lottery tickets at a handful of gas pumps and ATMs around the state.

The new effort, intended to encourage more ticket sales, comes as the state budget has grown more reliant on the Missouri Lottery to fund public education.

In the budget that takes effect July 1, the state Legislature is gambling that the lottery will generate record sales and transfer a record $298.5 million back to the state.

“We’re going to aggressively pursue that goal,” said Judy Gehrke, chief financial officer for the Missouri Lottery.

The Lottery Commission plans to roll out play-at-the-pump sales at 15 gas stations across the state, on about 150 individual pumps, this fall. Motorists will automatically see the lottery option and be able to purchase electronic or receipt-printed tickets when they insert their debit cards to pay for fuel. Payouts less than $600 go directly to the winner’s debit card.

Also as part of the lottery-boosting effort, 100 ATMs will be equipped to sell electronic tickets.

The ATMs all will be in the St. Louis and Kansas City areas; the locations of the gas stations have not been determined.

The pilot programs could be expanded later, depending on the response.

During a recent presentation on the new initiatives, the Lottery Commission made its goals clear. “Attract players that have never played lottery. Nonplayers become frequent players. Frequent players become regular in-store customers,” the commission’s summary reads.

“We have already gotten a lot of interest,” Gehrke said, noting that convenience stores won’t be required to offer play-at-the-pump.

With the lottery seeing record sales numbers the past three years, lawmakers — Republicans and Democrats — have shown increased interest, eyeing the lottery as a way to generate more money without raising taxes. That’s led lottery officials to look for ways to generate more sales.

Lottery ticket sales surpassed $1.097 billion last year — nearly twice the amount sold a decade ago. For the budget year that ends June 30, the program is budgeting a $1.15 billion target.

Gehrke said the lottery is on track to transfer $288.5 million toward education funding this year, which would be a record for the state.

“We’re increasing every year,” she said. “We’re continuing to grow and also continuing to hit goals.”

But she also noted that the goals keep moving up.

In his January budget proposal, Gov. Jay Nixon, a Democrat, called for the lottery to generate a $2 million increase for the state compared to the current year. The Republican-controlled Legislature upped that amount to $10 million.

That record expectation from the lottery next year comes on the heels of a demand for a $35 million increase in the current budget. Last year, lottery officials admitted that there was no clear plan for such record-setting sales but vowed to increase marketing efforts.

The increased pressure on the lottery has left millions in the state budget to chance.

Gehrke said she suspects the lottery is on track to meet the Legislature’s goal this year largely because of increased interest that has followed three record Powerball and Mega Millions jackpots.

“A lot of it is jackpot-driven,” she said.

Again this year, lawmakers gave no clear direction for generating the $10 million increase that they expect. A failure to meet the growth expectation could create a hole in the budget.

“It seems like the advertising we’ve done so far has been very effective,” Gehrke said. “We’re also going to do our best to make up for it through the new initiatives.”

The Legislature did provide increased advertising dollars to help promote the lottery in the coming year — about $4 million more.

But the lottery isn’t without its critics, many of whom question whether the state should be in the business of promoting gambling.

During one of the Capitol hearings with lottery officials, Sen. Rob Schaaf, R-St. Joseph, said the advertising increase would take money away from other programs. He said promotions and easier access encourage people to spend their limited resources on lottery tickets.

“Sometimes you have to look at things beyond the return,” he said.

E-ticket sales through ATMs and gas pumps have only been tried in Minnesota, so far.

Ed Van Petten, executive director of Minnesota State Lottery, said the program, which is on a scale similar to what Missouri has planned, is running smoothly since it began in November.

“The technology seems to be working very well,” he said. “It’s not a ton of sales, but everything’s working appropriately.”

He said some convenience stores had expressed concern initially, fearing people would not be as likely to come inside and make other purchases if they could buy lottery tickets at the pump. But the preliminary analysis of the program has shown the opposite.

“What we have seen is it appears to have increased foot traffic,” Van Petten said.

It also has generated more interest in lottery games other than Powerball and Mega Millions.

“If customers want a scratch game or in-state game or something like that, it reminds them that they have to go inside to get it,” Van Petten said.

Elizabeth Crisp covers Missouri politics and state government for the Post-Dispatch. Follow her on Twitter at @elizabethcrisp.

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