Lottery Scratchers missing in action
Millions in revenue for education likely lost as pandemic limits distribution
The California Lottery’s Scratchers — games in which players rub foilcovered tickets with the edge of a coin to instantly reveal whether they’ve won — have become increasingly difficult to find around the state in recent weeks, and the impact will likely result in millions of dollars in lost revenue, The Chronicle has learned.
Lottery officials said the tickets, a popular afterwork perk or gift for graduations, likely will be in short supply for another month, reducing sales for many merchants while also cutting into money raised for public education, which is already facing a budget crisis due to the pandemic.
The shortage stems from a ticket distribution slowdown prompted by socialdistancing orders to help prevent the spread of COVID19 in lottery distribution centers near Sacramento, officials said.
“We continue to ship Scratchers products from our two distribution centers in West Sacramento and Rancho Cucamonga, but there is an approximate three to fourweek delay in fulfilling orders,” lottery spokesman Jorge De La Cruz said.
Retailers around the bay told The Chronicle that they’ve been unable to order new tickets and supplies are running out. Vending machines, which offer a selection of 24 scratchoff tickets, are empty or close to empty in many stores throughout the East Bay. On the Peninsula, a reporter who stopped at several locations couldn’t find a single ticket.
The delivery delays are not limited to the Bay Area, De La Cruz said.
Tickets are commonly sold at gas stations, convenience stores and doughnut shops, and they range in price from $1 to $30. They offer prizes of as much as $10 million, though most winners collect far less. Winning tickets often simply allow people to play again. The state
lottery website lists 57 different Scratchers games, which account for about 76% of the lottery’s $7 billion in annual revenue.
At a 7Eleven in Albany that sells a lot of tickets, the Scratchers display beneath the glass counter was nearly empty last week.
“We’re out of everything, just about,” said Renu Sikand, the store’s manager. “Out of 32 types of tickets, we have just five tickets left.”
Those five were all highervalue tickets: $10, $20 or $30.
The $1.7 billion the lottery raises annually for education accounts for just 1% of the state’s public education budget, but that small percentage comes out to millions of dollars. According to the Public Policy Institute of California, the state’s public schools have a budget of about $97.2 billion a year with 58% of that money coming from the state.
“We do not have an estimate on the losses in the lottery revenues and the amount that’s directed to schools at this time,” De La Cruz said, “but the California State Lottery will continue to do everything possible to follow our mission to maximize supplemental funding for education.”
Several lottery retailers said they’ve been calling the state lottery each day as their supplies dwindle, but they’ve had no luck in getting more tickets.
“I’ve been asking for an order to come for the last couple of weeks,” said Sikand, who usually receives a weekly delivery of scratchoff tickets. “They keep saying, ‘We’ll do it, we’ll do it,’ but they never come.”
While the scratchoff ticket shortage will certainly cut into revenues, Sikand said it’s too soon to measure the impact. But customers are starting to notice the shortage, even noting it on Twitter.
IvaMarie Palmer, a Los Angeles author, sent out a tweet about “a Scratcher ticket shortage in California” after a conversation with a liquor store owner.
De La Cruz said the lottery is staggering shifts, using overtime, reconfiguring its warehouses, simplifying orders and hiring more employees in an effort to speed up the distribution process and cut the backlog while protecting workers from COVID19.
How much the lottery — and schools — will lose from the ticket shortage and the lottery’s other games, in which players pick numbers hoping to match what lottery officials randomly draw, has not yet been calculated, De La Cruz said.
But the shortage in tickets will add to the impact the coronavirus outbreak has had on the lottery. Games like Powerball and Mega Millions saw sales drop by as much as 35% in April. Sales are now down about 20%, De La Cruz said.
The biggest hit was to the kenolike Hot Spot games in which winning numbers are picked every four minutes. Most of those games take place in bars and restaurants, which were shut down during the statewide
“We do not have an estimate on the losses in the lottery revenues and the amount that’s directed to schools at this time.”
Jorge De La Cruz, Lottery spokesman
shelterinplace orders. Hot Spot sales fell by as much as 50% but have almost completely recovered as more of the state’s businesses have reopened, De La Cruz said.
In February, a state audit found that the California State Lottery shortchanged schools by tens of millions of dollars by failing to follow a revision in state law intended to maximize education funding.
As a result of the economic shutdown, Gov. Gavin Newsom has proposed eliminating $14 billion in funding for public schools, health care, social services, universities and state worker salaries unless California receives additional aid from the federal government.