Mary­land Lot­tery will in­tro­duce $30 scratch-off

$2,000,000 For­tune game seeks to cash in on in­ter­est in high-end gam­bling

Baltimore Sun - - FRONT PAGE - By Jeff Barker

Mary­land Lot­tery reg­u­la­tors ap­proved Thurs­day the launch of their most ex­pen­sive ticket ever — a $30 scratch-off — fol­low­ing a record sales year in which play­ers showed they were in­creas­ingly will­ing to pay more for a chance at a for­tune.

The Lot­tery and Gam­ing Con­trol Com­mis­sion ap­proved the new ticket, “$2,000,000 For­tune,” on a voice vote at its monthly meet­ing. It will de­but in the first quar­ter of next year.

The ticket’s $2 mil­lion top prize will be a state high for instant tick­ets, also known as scratch-offs.

Lot­tery of­fi­cials said they were ea­ger to tap into a trend — ev­i­dent in Mary­land and other states — of many play­ers by­pass­ing $1 and $2 tick­ets in fa­vor of higher-end tick­ets that of­fer much larger prizes.

The high­est-priced ticket now sold in Mary­land is $20, and the low­est is $1. But17 states have tick­ets that cost at least $30, and Texas sells a $50 ticket.

“It is a trend in the in­dus­try and one in which we’ve seen pos­i­tive re­sults in other states,” lot­tery Di­rec­tor Gor­don Me­denica said. “We want to get on that band­wagon.”

Sales of $20 tick­ets in Mary­land rose from $62.1 mil­lion in 2013 to $75.2 mil­lion in 2015, a 21 per­cent in­crease. Sales of $1 tick­ets were flat in the same pe­riod, and

sales of $2 and $3 tick­ets de­clined.

An­a­lysts said the high­est-priced instant tick­ets — so called be­cause play­ers can find out im­me­di­ately if they won — can be al­lur­ing.

“For peo­ple who like instant grat­i­fi­ca­tion … the high price of the tick­ets is a price worth pay­ing for the com­bi­na­tion of instant grat­i­fi­ca­tion and the prospect of lifechang­ing win­nings,” said Ge­orge Loewen­stein, a pro­fes­sor of eco­nom­ics and psy­chol­ogy at Carnegie Mel­lon Univer­sity.

The scratch-offs have be­come a cash cow for the Mary­land Lot­tery. To­tal lot­tery sales rose 8.2 per­cent to a record $1.9 bil­lion in the fis­cal year end­ing June 30. Sales of instant tick­ets in­creased by 12 per­cent to $611 mil­lion.

The state re­ceived $570 mil­lion from the lot­tery in the last fis­cal year, and $510 mil­lion from casi­nos. The lot­tery is the fourth-largest source of rev­enue for the gen­eral fund, be­hind in­come, sales and cor­po­rate taxes.

The state usu­ally of­fers be­tween 50 and 60 instant ticket games for sale at any given time. Tick­ets are avail­able in con­ve­nience stores, gas sta­tions and other re­tail­ers.

Instant tick­ets con­tain built-in ad­van­tages for play­ers. While re­sults vary from game to game, they of­fer rel­a­tively high av­er­age pay­outs — from about 59 per­cent of sales for a $1 ticket to as much as 78 per­cent for a $20 ticket.

That com­pares fa­vor­ably to an­tic­i­pated pay­outs of 50 per­cent for Powerball and Mega Mil­lions, which hold reg­u­lar draw­ings, and be­tween 60 per­cent and 68 per­cent for Race­trax and Keno, ac­cord­ing to state data ob­tained in a public records re­quest.

The pay­out is the amount of money col­lected by the state that re­turns to play­ers in the form of prizes.

The pay­out for the $30 ticket will be 79.6 per­cent, ac­cord­ing to lot­tery of­fi­cials.

Be­cause the ticket has un­usu­ally large prizes, the state’s profit mar­gin on the game is ex­pected to be lower than on other scratch-offs. But Me­denica said Mary­land an­tic­i­pates mak­ing up the dif­fer­ence through healthy sales.

“As long as we think to­tal profit dol­lars will in­crease, then it’s worth it,” he said.

De­tails of the $30 ticket were still be­ing fi­nal­ized, and the odds of win­ning the $2 mil­lion prize — or lesser prizes — weren’t yet avail­able. In Texas, the odds of win­ning the $50 ticket’s top prize of $7.5 mil­lion are 1 in 1.2 mil­lion.

The lower-tier prizes ac­count for most of the over­all pay­out. But it’s the big, splashy pos­si­bil­i­ties that of­ten at­tract play­ers.

“Big num­bers bring out ev­ery­one,” said Jef­frey Beck, a gam­bling and ad­dic­tions coun­selor. “There’s some­thing about $2 mil­lion that has a magic feel to it.”

Beck said the in­tro­duc­tion of a $30 game poses new risks for prob­lem gam­blers.

The state says it dis­cour­ages prob­lem gam­bling through mes­sag­ing on tick­ets, a graphic on the web­site of the Mary­land Lot­tery and Gam­ing Con­trol Agency, in­for­ma­tion on the mon­i­tors at re­tail lo­ca­tions around the state, and a tele­phone help line (1-800-GAM­BLER).

At the Soda Pop Shop Mart, a Ca­tonsville con­ve­nience store pop­u­lar with lot­tery play­ers, opin­ions about the new ticket were mixed.

The walls of the store are lined with bright Mary­land Lot­tery logos. Play­ers sit around a large, round table fill­ing out tick­ets Stin­son Barth, left, buys lot­tery tick­ets from P.J. Pa­tel at the Soda Pop Shop Mart in Ca­tonsville. About 50 to 60 scratch-off games are avail­able in the state at any given time. with pen­cils.

“We have a lot of peo­ple who don’t do smaller than $20 or $10 tick­ets,” said store owner Ra­jesh Pa­tel. “Peo­ple want to get big money.”

But when reg­u­lar player Keyana Grif­fin heard about a $30 ticket, she ex­haled. “That’s a lot to lose.” Wil­lie Wright agreed that $30 “is kind of steep.”

“I’m re­tired.” Wright said. “I’ve got a fixed in­come.”

Me­denica said he knows a $30 ticket isn’t for every­body. “That’s the whole point of choice,” he said. “We want a wide port­fo­lio of games so we can at­tract play­ers who have dif­fer­ent al­le­giances to play­ing.”

The no­tion of buy­ing in­creas­ingly ex­pen­sive tick­ets seems coun­ter­in­tu­itive, said Robert Wil­liams, a pro­fes­sor and gam­bling re­searcher at the Univer­sity of Leth­bridge in Al­berta, Canada.

“Ev­ery con­sumer wants the ini­tial out­lay to be as small as pos­si­ble and the ul­ti­mate pay­off to be as large as pos­si­ble,” Wil­liams said. But he said some peo­ple get ex­cited about “the hoopla” as­so­ci­ated with pricey games.

Last win­ter’s $1.58 bil­lion Powerball jack­pot — the largest lot­tery prize in U.S. his­tory — at­tracted enor­mous in­ter­est in the state. State re­tail­ers sold $73.2 mil­lion in tick­ets. Two of the top sell­ers were in the Bethesda area, which has one of the high­est me­dian house­hold in­comes in the state. Mary­land had three $1 mil­lion win­ners. A Powerball ticket costs $2. The odds of win­ning the jack­pot were 1 in 292 mil­lion.

Given the steep odds of many lot­tery games, statis­ti­cian Ron­ald Wasser­stein said, the “smart play is not to spend too much money” on tick­ets.

“At best it is en­ter­tain­ment,” said Wasser­stein, ex­ec­u­tive di­rec­tor of the Vir­gini­abased American Sta­tis­ti­cal Association. “At worst it is a cash sink.”

ALGERINA PERNA/BAL­TI­MORE SUN

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