Huge jackpots for Powerball and Mega Millions helped generate unexpected millions in the last fiscal year for education in Louisiana.
“We had a $2 (per ticket) increase in Powerball (and) we had two really good Powerball jackpots,” said Rose J. Hudson, president of the Louisiana Lottery Corp., on Tuesday.
Hudson recently notified legislators that the corporation produced a $3.65 million surplus for the state treasury in the state fiscal year that ended in June. The surplus — all of which goes to education — stemmed from ticket sales and the corporation’s operating expenses finishing under budget.
The state expected to generate $380 million from ticket sales for scratch-offs, Powerball, Mega Millions and other games in the 2012-13 fiscal year. Instead, the state generated $447 million in a fiscal year that saw the Powerball jackpot surpass half a billion dollars.
Lottery proceeds are divvied up by a formula that allows the corporation to send additional dollars to the state treasury, depending on how much is needed for operational expenses.
A formula determines how lottery revenue is distributed.
Fifty percent goes to prizes, 35 percent to basic state aid for schools and 5 percent to retailers. Less than 10 percent goes to operational expenses, including salaries and ticket printing costs.
Of the 35 percent for schools, $500,000 comes off the top to treat gambling addiction.
Instant scratch-offs, Pick 3, Powerball, Mega Millions and Pick 4 all resulted in budget-busting sales.
Even Hurricane Isaac did not prove to be a serious setback for lottery revenue.
The lottery corporation announced in October that revenue exceeded budget projections despite the flooding and electricity loss that downed some cash registers.
State government was not as flush with cash after Isaac.
In December, weak sales and personal income tax collections helped force Gov. Bobby Jindal to contemplate slashing funding for hospice care and domestic violence shelters.
Greg Albrecht, chief economist for the Louisiana Legislative Fiscal Office, said lottery ticket sales probably are influenced by jackpots rather than by a positive turn in the state’s economy.
A boost in scratch-off ticket sales, which give consumers a chance to win instantly, could be an indication of desperation over finances, he said.
“Is it because they feel richer or is it because they don’t feel richer?” Albrecht asked. “I don’t know if it’s a good sign or a bad sign.”
He said people also might pick up a scratch-off ticket when they stop by the gas station to vie for a Powerball jackpot.
Kimberly Chopin, communications director for the Louisiana Lottery Corp., said the entity is conservative in its budget projections since huge jackpots cannot be anticipated.
When the corporation finishes under budget, Hudson’s staff makes a recommendation on how much of the surplus should go to the state treasury and how much should remain with the corporation.
Hudson makes the final decision.
The corporation transferred $160 million to the state treasury for the past fiscal year, including the additional $3.65 million. Ticket sales not only were above budget but grew compared with the previous fiscal year.
The biggest surprises were in Powerball and Mega Millions, which finished far ahead of what the budget writers anticipated.
In May, the Powerball jackpot climbed past $500 million. The winner was an elderly woman, who bought her ticket at a Florida grocery store.
A week later, winnings came to Louisiana, when New Orleans ticket holders known as the Williams Trust shared in a $50 million payout.