With only weeks to go before the close of the state’s fiscal year, the New Hampshire Lottery finds itself behind in its revenue goals. Although we on the NH Lottery Commission are disappointed with the situation, no one is surprised. Disposable income for entertainment choices like lottery tickets has been drying up for more than a year now. The economic downturn has made it difficult for all state revenue channels – rooms & meals, tobacco, real estate and business taxes; liquor sales; highway tolls; tuition at state schools – to meet or exceed last year’s numbers. In fact, before the economic slowdown, the Lottery had enjoyed three consecutive record sales years.
While we’re disappointed to be behind our goal, we’re not necessarily disappointed in our sales. Given the challenges of this recession, we’re proud of the fact we’re only down by about 8% while neighboring lotteries are off by significantly more. This is a testament to our employees and our aggressive sales and marketing programs.
We have a mantra for players at the Lottery: "play responsibly." It’s a reminder for players that the Lottery is there for their entertainment, not as their retirement plan. A similar caution could be given to state government. The Lottery cannot over-perform to the tune of tens of millions of dollars simply because budget writers need it to.
That being said, this Lottery and its employees continue to work tirelessly to increase sales and continue to deliver the innovative gaming experiences our players demand. We have seen tremendous response to licensed instant tickets such as Boston Celtics Gold, Boston Red Sox, and NH Millionaire’s Club. We’ve witnessed a sensation caused by jackpots such as Powerball. And New Hampshire is the only state in which you can take all of your non-winning tickets and Replay! them online for additional prizes (at no additional cost).
In 2010 and beyond, the New Hampshire Lottery will continue to prove itself to be the most innovative lottery in the country. Already planned are major changes to Tri-State MegaBucks, some new instant ticket promotions, and an old-fashioned drawing in which someone walks away with a million dollars. Internally, the Lottery will conduct a thorough examination of its Internet database to be on the leading edge of player trends and preferences (in every other state, lottery purchases remain anonymous and untraceable; only New Hampshire has developed an automated database of "addressable" customers and buying habits).
Should the Legislature pass and the Governor sign measures that enact expanding gaming, the NH Lottery stands ready to provide oversight, marketing and support. Forty-five years ago, New Hampshire defied the naysayers and implemented a secure, profitable and reliable revenue source in the country’s "first lottery." New Hampshire became the model for 42 other states; today a third of them have some form of expanded gaming.
In the past this Commission has taken the position that it cannot consistently meet the ever-inflating revenue expectations put on it by budget writers unless it has player preferred new products to offer. Our players say they want new kinds of lottery and gaming experiences. We’ve learned if we provide them these experiences they will buy. If we don’t they will go elsewhere with their gaming dollars. The amount of New Hampshire dollars spent on gaming outside of the state backs up this assertion. If these products are not made available to the Lottery, then those same budget writers need to revise their expectations as to what an honest revenue projection should be for a lottery that only offers its customers instant tickets and weekly drawings in a state of 1.1 million people.
Not lost in any of this discussion is the fact that the New Hampshire Lottery exists for one reason: to raise money for local education. Since 1964, we’ve sent more than $1.4 billion back to school districts to pay for educational resources or offset the tax burden of those resources (depending on the priority of the community). By the end of this fiscal year, we will have sold more than $250 million in tickets, putting more than $70 million in net proceeds into the education trust fund.
Each year, the New Hampshire Lottery will strive to maximize the revenues of the products the legislature authorizes it to responsibly sell. If the governor and legislature see fit to give the Lottery the power to offer enhanced products – such as video lottery terminals – we’re positive we can make the most of these games as well. Doing so would go a long way toward helping the Lottery achieve its yearly goals, even in this tough economy and for years to come.