Ohio Lottery has more to offer than a winning ticket

By Andrew Bugel, Tyler Trill

People play to win the lottery. It’s a simple fact. Even though winning lottery tickets are hard to come across, it doesn’t mean everybody loses. Ohio school districts have something to gain.

Since its birth in 1974, the Ohio lottery has consistently been a successful industry, creating jobs and generating hundreds of millions of dollars back into the economy. You can’t wander too far without finding a business that sells lottery tickets. With so many tickets being sold and money being made, many people wonder where the money goes and if it is being put to good use.

“Exactly 100 percent of the profits from the tickets we sell every year are transferred to the education fund to support our school districts,” said Marie Seckers, communications manager for the Ohio Lottery. We’re actually one of the largest lotteries in the country. There’s over 43 lottery jurisdictions in the U.S. and Ohio is usually ranked in the top ten in terms of ticket sales every year.”

The common argument is whether or not exactly all of the profits are going towards education.

The Ohio Department of Education Budget and School Funding Director, Aaron Rausch backs Seckers’ statement.

“What people need to understand is that not all of the money raised goes towards school funding,” Rausch said. “Only the profits go towards education. The cost of operations, payouts to winners, employment, administration costs, store portions all have to be paid for as well to keep the operations going.”

Rausch says the profits are dispersed through a general assembly fund. “The largest portion of funding goes straight to the schools,” Rausch said. “We have 612 traditional schools, 49 career center and over 380 community schools in the state of Ohio. There is no specific dollar amount that goes towards each school, it just depends on the needs. The second biggest portion of the money goes towards our ‘Straight-A’ fund. This fund provides grants to local school districts to allow schools to investigate new and innovative ideas to educate students.” Richard Lewis is the Executive Director of the Ohio School Boards Association (OSBA). Lewis says that the infusion of lottery profits does not increase school funding. “Lottery profits supplanted the existing funds rather than supplementing them,” Lewis said. “In recent years, the lottery profits have been redirected from the public schools on a per pupil basis, and are now also used to fund voucher programs, the Straight A Fund, and charter schools facility funding. According to OSBA member John Chambers, while profit money from the Ohio Lottery is directed towards schools, it is pre-determined how much will be received. Chambers says that any new profits will not necessarily go towards school funding. “If the Ohio Lottery was planning on giving schools $100 million in lottery profits and the lottery ended up making $50 million more in profits throughout the year, so instead of giving the school $150 million, the school will take the additional $50 million from the lottery and $50 million from the state fund instead of the initial $100 million, while the extra $50 million will go towards other programs such as the Straight A Fund,” Chambers said.

History

Former Ohio Senator Ron Mottl led a campaign to create a lottery in Ohio in 1971. In May of 1973, Ohio voters approved State Issue 1, a constitutional amendment to allow the sale of lottery tickets, creating the Ohio Lottery. In August 1974, the Ohio Lottery officially sold its first ticket. The lottery has changed drastically over the years. In an attempt to increase player involvement, many new games such as “Pick 3”, “Pick 4” and “Mega Millions” have been marketed. Many of the games involve faster play action and have led to an increase in ticket sales since the early 1990’s.

A Breakdown of Numbers

In 2014 alone, the Ohio lottery brought in $3.6 billion dollars in total revenue. About $990 million of that money was donated towards education.

Stores see a percentage of the profits based on the number of ticket sales and cash prizes awarded.

“Stores get 5.5 percent per sale of lottery tickets,” Seckers states. “About four percent of the total profits also go towards administrative costs. Stores also make money depending on cash prizes won. Prizes up to $599 can be cashed as retail and an additional one percent of the sales will be awarded to the store in prizes that are cashed, so everybody wants to see a win.”

Portage County alone has managed to make millions off of the sale of lottery tickets. So far in 2015, a total of more than $10.1 million has been made in total sales just off the top ten highest-selling locations in the county.

Carla Futrell is the store owner of the Westside Food Market on West Main Street in Stow. Though her location is not in the top ten in total sales this year, she says the number of people that buy tickets daily is staggering.

“Every day, we sell a ton of lottery tickets,” Futrell says. “It’s always been that way. People just want a chance to win so bad and they are definitely our highest selling product by far. I remember when the lottery first came to Ohio and you didn’t find tickets in every single store. Now, you can’t go anywhere without seeing lottery tickets and there are so many different types of games to choose from.”

 

Impact of casinos

According to Seckers, the addition of casinos in Ohio have not had a negative impact on lottery ticket sales.

“The gambling landscape has changed dramatically in the last few years,” Seckers said. “In general, lotteries have found casinos have had the biggest impact on lottery sales in the communities where they reside. The Ohio Lottery saw a small dip in traditional lottery game sales from 2012 to 2013, but ever since then. the number of tickets sales has increased steadily. Last year’s total revenue off traditional lottery tickets was $2.87 billion and when you include the lottery’s share made from video lottery machines, mostly found in casinos, that number rose to $3.6 billion.”

Gambling to Win

Why do people play the lottery? The chances of winning on a single ticket are about one in 175 million. That doesn’t stop people from buying a ticket in hopes they may be that one person to win big.

“If I put up a buck and I end up winning a million dollars, it’s the best investment of my life,” said Dan Pompili, a resident of Youngstown. Plus, it’s just so darn cheap. Granted, they have a lot of different games you can play but if you just want a regular ticket, it’s one dollar.”

Pompili says he has no problem knowing that gambling money is being used for school funding.

“I’m just glad my money is being put to good use,” Pompili said. “I lived in Las Vegas for a bit a long time ago and they’re the gambling capital of the country, but they use their money wisely. So much of that gambling money goes back into the economy and that’s led to Las Vegas having better school districts, road and infrastructure because they are using the money wisely.”

Conclusion

Portage County made a total of $37 million in total lottery sales last year. Seckers does not believe the number of sales will fall off anytime soon.

While the lottery does have its disadvantages with obsessive gamblers, many people believe it is generally a positive thing and are happy the profits are going towards a good cause.

“You will always have gambling addicts everywhere, but there are negatives to everything,” Pompili said. “The fact that so much money is going towards schooling is very good and that’s a big positive.”