By John Lyon
Arkansas News Bureau

LITTLE ROCK — Absent a spike in the economy before the end of the year, Arkansas will start its state-run lottery in the midst of a recession — not necessarily a bad time to get into the business, industry insiders say.

They say some state lotteries are feeling the effects of the economic downturn while others seem to be bucking the trend, to some extent at least.

“Some are down, some are up slightly. Those who are up, I’ve heard them say that they think they would have been up more, except for the recession,” said Chuck Strutt, executive director of the Multi-State Lottery Association.

“Some of the states’ sales are down a bit, maybe 1 or 2 percent. Other states are up,” said David Gale, executive director of the North American Association of State and Provincial Lotteries, or NASPL.

According to NASPL, lottery ticket sales nationwide totaled $60.6 billion in fiscal 2008, up $2 billion from the year before. Strutt and Gale said they did not know whether the recession would bring nationwide sales down this year.

“There are two theories of thought out there,” Gale said. “(One theory is) when the economy is bad, more people come into the games hoping to win.

“The other side of the coin is, if you have fewer dollars left over at the end of the month after paying all of your bills, that’s going to affect your discretionary spending, regardless of what you’re spending it on.”

In neighboring Missouri, lottery ticket sales are down 3 percent for the fiscal year so far compared to a year ago, said lottery spokeswoman Susan Goedde.

Missouri has sold $873 million in tickets, down from $901 million this time last year, Goedde said. The lottery is projected to collect $965 million by the end of the fiscal year, compared with $995 the previous year.

“I assume some of the effect has been from the economy, but also Powerball has not had the jackpots that it’s had in the past,” Goedde said.

Powerball is a multi-state game, currently available in 30 states, the District of Columbia and the Virgin Islands, known for offering multimillion-dollar jackpots. The longer a jackpot goes uncollected, the larger it gets — and the more players it attracts.

“We haven’t had the luck with them that we had in other years,” Goedde said, meaning players have been so lucky so often that the jackpots have stayed relatively small.

Ray Thornton, chairman of the Arkansas Lottery Commission, has said he does not expect Arkansas to join any multi-state games in the lottery’s opening months.

Oklahoma has sold $173.8 million in tickets this year, down 7 percent from a year ago, said Rollo Redburn, the lottery’s director of administration. The lottery is projected to end the fiscal year with $193 million in sales, compared to $204 million last year.

Redburn also blamed smaller Powerball jackpots for some of the slump, but he said the economy surely played a part.

“When times get a little tough, people cut back on their discretionary spending,” he said.

In Texas, the lottery has collected $2.6 billion so far this year, or 1.7 percent less than a year ago, spokesman Bobby Heith said. The lottery is projected to collect $3.64 billion by the end of the fiscal year, compared to $3.67 billion last year.

Heith said the economy cannot take all the blame for the decline. Lottery officials have estimated that between $12 million and $14 million of the drop in sales is related to the impact of Hurricane Ike on Houston, the state’s largest sales district, he said.

Meanwhile, Louisiana’s lottery has sold $346 million in tickets this year, a 1.6 percent increase from a year ago. The lottery is projected to collect $374 million by the end of the fiscal year, up from $373 million the previous year.

Spokeswoman Kimberly Chopin said Louisiana’s economy is still rebounding from the devastation caused by Hurricane Katrina in 2005.

“There’s a lot of rebuilding going on. I think that’s one of the reasons” for the growth in sales, she said.

Louisiana lottery officials also work hard to keep attracting players with new and limited-time games and promotions, such as a “second chance” game in which players get another chance to win with tickets that had losing numbers the first time around, Chopin said.

Some lottery officials said Arkansas has advantages that should boost ticket sales despite the recession. For one, Arkansas has never had a lottery before.

“The excitement that’s created by the newness of your games, plus the added media publicity and exposure, because it is big news, certainly contributes positively to sales,” Chopin said.

Redburn noted that Arkansas’ lottery will have comparatively little competition.

“Over here in Oklahoma, we’ve got about 100 Indian casinos, so there’s a lot of competition for the gambling dollar here,” he said.

Louisiana’s lottery had its most profitable year in 1993, its first full year of operation, with $493 million, but sales dropped each year for the next three years. Chopin said competition was undoubtedly responsible for some of that decline.

“We have off-track betting, we have racinos (combined race tracks and casinos), we have a few land-based casinos, we have riverboat casinos, we have Native American gaming, we have video poker and then obviously charitable gaming too in Louisiana. Some of that (decline in ticket sales in the 1990s) is going to be due to the fact that people had other ways to spend their discretionary dollar,” she said.

Arkansas’ horseracing track in Hot Springs and dog track in West Memphis both offer electronic gaming. Wagers on the games since their inception in November 2006 surpassed $1 billion last January.

Lt. Gov. Bill Halter has projected $400 million in annual sales from Arkansas’ lottery. Early estimates of annual state revenue from the lottery ranged from $55 million to more than $100 million, although the estimates were made before the effects of the national recession hit the state in earnest.