Originally created 02/23/98

Slow lottery sales may impact school programs



ATLANTA -- The lofty growth rate of Georgia's nearly 5-year-old lottery has slowed just as state lawmakers are hoping to cement into the state constitution the college scholarships and pre-kindergarten classes it pays for.

Revenue from just about every game was down during the first six months of fiscal 1998, and the overall take was off $45 million from the comparable period a year earlier, according to Georgia Lottery figures.

Lottery President Rebecca Paul says sales have picked up so far in 1998, and she expects revenues for the fiscal year, which ends June 30, to come close to if not match last year's $1.7 billion.

Nonetheless, the state is budgeting for increases in lottery spending on HOPE scholarships and pre-kindergarten classes funded.

And a political duel of sorts is being played out in the General Assembly between two Democratic gubernatorial candidates - Secretary of State Lewis Massey and Cobb County Rep. Roy Barnes - to see which one can get credit for a proposed amendment on the fall ballot to lock at least some of those programs into the Georgia Constitution.

Gov. Zell Miller, father of the Georgia lottery, HOPE scholarships and the pre-kindergarten program for 4-year-olds, isn't surprised the bloom has gone off the games.

"I don't think it is going to be down (at the end of the year). It's going to level off," he said. "What I'm surprised about is it kept increasing year after year. I thought it would level off before this."

Miller was elected governor in 1990 promising a lottery for education. Once he won, even skeptical lawmakers took it as a mandate and placed the lottery on the 1992 ballot.

It narrowly passed, but the programs it spawned, particularly HOPE college scholarships, have become wildly popular in Georgia and other states wanting to copy Miller's patent.

Under HOPE, high school students graduating with a "B" average get to attend a Georgia college tuition-free. They must maintain the "B" average to keep the scholarship.

HOPE also provides a free technical-school education to Georgians.

Miller's lottery has been exceeding expectations for years. While most states see their lotteries drop off after the first year, Georgians just kept playing, and sales revenue - 35 percent of which goes toward education - continued to rise.

However, during the first six months of this fiscal year, lottery figures show revenue dropped to $783.6 million from $828.6 million during the same period a year earlier.

Sales for the big-jackpot games like Lotto have struggled for more than a year. But sales of tickets that bring in most of the money, like instant win, also were off during the first half of fiscal 1998.

Paul said a huge Cash 3 payday last year forced the lottery to reduce prize payouts and that hurt sales.

However, payouts have increased, the multi-state Big Game has gone from one drawing to two a week, and sales are rolling again, she said.

"We certainly have a strong possibility of ending where we were last year," Paul said. "I would guess we are at a plateau, as opposed to a decline as everybody else sees it."

Lawmakers are considering a fiscal-1999 budget proposal that would increase lottery funding for HOPE scholarships about 20 percent and pre-kindergarten 3 percent.