As Revenues Slow, Lotteries Expand
In order to entice more players, states are considering video poker and other electronic games. STATE GAMBLING
AMERICA'S enthusiasm for lotteries, which fattened state treasuries throughout the 1980s, may finally be fading.Double-digit growth pushed lottery sales to $21 billion in 1990, but now revenues seem to be reaching a plateau. Alarmed by the trend, some states are scrambling to come up with new gambling gimmicks, like video poker, to keep the profits rolling in. "There's no doubt that as we become more mature, our sales will level off," says Mike Carr, president of the new Louisiana lottery. "There will also be more competition from other forms of gambling, like riverboat gambling and video gambling." Louisiana launches its lottery, the 34th in the nation, on Sept. 6. Nationwide, state lottery revenue grew just 7.7 percent last year - a sharp slowdown from the '80s. Thirty-two states and the District of Columbia earned lottery profits of just under $8 billion in 1990. Two factors seem to be cooling lottery mania, says Charles Clotfelter, a Duke University professor who is co-author of "Selling Hope: State Lotteries in America." One is the recession, Mr. Clotfelter says. The other is boredom. Even so, lotteries continue to spread, even into states with hard-core opposition like Louisiana. Despite strong resistance from Southern churches, Texas, Georgia, and North Carolina are among states that may be moving closer to their own lotteries. "A referendum to approve a lottery would pass easily in North Carolina," Clotfelter predicts. The hottest lottery controversy this year, however, has blown up in Oregon, far from the nation's Bible Belt. After years of steady growth, Oregon's lottery revenues peaked in fiscal year 1990 at $163 million, then fell to $147.3 million in FY 1991 that ended June 30. The decline in Oregon took place even though lottery operators tried to spice up the excitement with Lotto America, Daily 4, and Sports Action. Anxious to attract new players, Oregon now wants to launch two additional gambling games, but state officials have run into a buzzsaw of opposition. Keno, a kind of 5-number bingo, is scheduled to go on-line Sept. 13. Oregon lottery officials, who studied computerized keno gambling in southern Australia, predict it will add $20 million a year to the state's ticket sales. However, a much bigger uproar was created in July when the legislature approved video poker in bars, taverns, and other licensed establishments that will not admit anyone under the age of 21. Video poker allows players to gamble with electronic cards against a computer. State officials predict between 8,000 and 10,000 video-poker machines will be installed. State gambling revenues are expected to rise by $50 million a year. Opponents, led by the Ecumenical Ministries of Oregon, have managed to derail video poker, at least temporarily, by challenging it in court. Gov. Barbara Roberts (D) indicates she will not allow video poker to begin until the court challenge is settled. Rodney Page, executive director of Ecumenical Ministries, says it is the job of people everywhere to "rail against the night" and halt the nationwide spread of gambling. "When the lottery first came in a few years ago, Ecumenical Ministries tried to stop it," he says. "We made a prediction. One, that revenues would begin to decline, and the state would have to come up with newer, better games to entice people to play. That has happened. "Two, that they would have to spend a greater and greater share of revenues to advertise. Now we have a government entity spending inordinate amounts of dollars, millions, to entice people to gamble their money away, promising fantasy dreams of untold wealth. That is an unseemly picture." The Rev. Dr. Page concludes: "The state of Oregon has become an addict. They are addicted to the revenue that gambling has produced. When anyone is addicted, friends try to put him into treatment, and now is the time for the citizens of Oregon to put this state into treatment." However, state Rep. Bill Markham (R) of Riddle scoffs at Page's charge that gambling creates a myriad of social problems. "Pure bunk," he says. "The public itself voted these things in [in 1984].... The ministers have to do their thing, and of course they are going to bad mouth it." Gwenn Baldwin, a spokeswoman for Governor Roberts, says the governor signed the video poker bill because it will help the state crack down on several thousand video machines now being used for illegal gambling. That was the heart of the issue, Ms. Baldwin says. But Page disputes that logic, noting that such machines already were outlawed in many Oregon counties, including Multnomah (Portland). Experts say new forms of gambling are likely to multiply. Paul Dworin, publisher and editor of Gaming & Wagering Business magazine, predicts the spread of video poker, interactive betting, TV betting, and sports betting in the years ahead. Clotfelter agrees: "It's a worldwide phenomenon. People like to play these games."