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State expects to sell $55 million in tickets for record Powerball

Published: Thursday, Nov. 29, 2012 10:00 a.m. CST
Caption
(Photo by Tim Dominick/The State/MCT)
There was a continuous stream of customers buying Powerball lottery tickets thoughout the nation, Wednesday, November 28, 2012.

(MCT) — Between casinos, video poker machines and old-fashioned horse tracks, people in Illinois have more state-sanctioned gambling options than ever before.

Still, nothing stokes dreams of a multimillion-dollar payout quite like a nine-figure lottery jackpot.

The Illinois Lottery estimates it will sell about $55 million worth of tickets for the multistate Powerball jackpot that hit a record $550 million Wednesday, as both longtime lottery players and rookies shelled out $2 per ticket for a chance to change tax brackets.

Regardless of whether an Illinois resident is a winner, the state will come out ahead, said Michael Jones, superintendent of the Illinois Lottery.

"It's huge," Jones said Wednesday. "These events are really our Super Bowl."

But determining who benefits — and by how much — from the surge in spending on Powerball tickets in Illinois is difficult to quantify.

Powerball sales for Wednesday's drawing will generate an estimated $22 million for a state education fund, though lottery officials and people at some educational organizations disagree about the overall effect of that money.

Stores that sell Powerball tickets will definitely make some extra money, said Victor Matheson, an economics professor at the College of the Holy Cross in Massachusetts who has studied lotteries and gambling.

"This is a good day to be a 7-Eleven owner," Matheson said. "It's a little bit like an early Christmas for retailers."

But stores that don't sell lottery tickets could see a temporary decrease in sales, Matheson said.

"I imagine that it is not a great day for Starbucks," he said. "People are buying a couple of lottery tickets rather than a latte."

The $2 it costs to buy a Powerball ticket is split several ways, with half of that amount going to the prize fund, lottery officials said.

Five percent, or 10 cents, goes to the retailer, leaving 90 cents to be used for the lottery's operating costs, plus other expenses such as the state education fund and a state capital projects fund, officials said.

Illinois Lottery games generated nearly $640 million for the Common School Fund in fiscal year 2012, up from nearly $632 million in 2011 and $625 million in 2010.

States began creating lotteries in the 1960s and soon tied them to education funding as they encountered resistance from people who considered gambling a sin, said Patrick Pierce, a political science professor at St. Mary's College in Notre Dame, Ind., and the author of a book on the politics of legalized gambling.

The tactic generally worked, and state-sponsored lotteries continued to spread, Pierce said.

"Folks have been kind of desensitized to gambling," Pierce said. "Nobody is going to take you seriously anymore if you start talking about how it's sinful."

People can more easily justify spending a few bucks on a lottery ticket if they know that some of the money will go toward supporting schools, said Jones, the Illinois Lottery's superintendent.

"Most people who play the lottery wind up losing to some extent, and they need to be confident that their losses are going to something that they believe in, that they believe is the common good," Jones said.

But the money generated by the Illinois Lottery makes up only a small portion of the state's Common School Fund. In fiscal year 2012, the lottery contribution accounted for about 10 percent of the fund's $6.07 billion in total deposits, according to the state comptroller's office.

The lottery's contribution is even less significant when compared to the more than $28 billion from all revenue sources that was spent on schools in Illinois in fiscal year 2011, said James Russell, associate executive director of the Illinois Association of School Boards.

The lottery's contribution simply takes the place of money that would come from other state sources and does not add to overall school funding, the association says.

"Does it help? Sure, $632 million does help," Russell said. "But it doesn't add to what the state is giving to schools."

Knowing that the lottery provides some money to schools also makes people more skeptical when school districts say they need more money, Russell said.

"People believe that there is all this money coming in from lottery funds, (but) it's just not the case," he said. "The perception differs from the fact."

But concern about where his money would go was the furthest thing from Marvin Harvey's mind Wednesday morning as he bought a Powerball ticket at a 7-Eleven near Wacker Drive and Wabash Avenue in Chicago.

Instead, he was making plans for the millions of dollars he hoped to win, including flying on a private jet to New York City and Paris.

"I've got it," Harvey, 48, told the store clerk as he bought his tickets. "This is it."

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