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Lottery sales going up, even as other gambling goes down

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Lottery player
Juri Bergmanis of Minneapolis works the ramp at the Minneapolis St. Paul Airport and stops by the airport lottery kiosk after his shift to chat and play the lottery. He shows off his winnings on July 26, 2012.
MPR Photo/Colin Campbell

The Minnesota State Lottery had a record year. Sales totaled $520 million in the year that ended June 30, topping last year's record by $16 million.  For the past five years, lottery sales have been climbing, even as sales of other forms of gambling have gone down.

The top selling location for Minnesota lottery tickets is the Minneapolis-St. Paul airport.

"Our goal this year is $1.6 million in sales, and we do it out of this 8 ft.-by-15 ft. booth here at the MSP international," said Jana Vaughn,  executive director of the Airport Foundation MSP. 

Ever since the lottery started in 1990, the airport has benefitted from what you might call a "captive audience" in the secure area of the airport, Vaughn said. The foundation's 6 percent cut of lottery sales funds airport beautification and travelers' aid.

"Most sales obviously are the passengers, people traveling through," she said. "A lot of people  don't have lottery in their state and as they're passing through, they'll pick up some tickets to take home with them."

Minnesota Lottery
The Minnesota Lottery had a record year. Sales totaled $520 million in the year that ended June 30, 2012, according to lottery officials.
MPR Photo/Colin Campbell

Sixty percent of airport lottery sales are to travelers like Charles Burhan, an insurance lobbyist on his way home to Chicago. 

"I'm a serial player as I travel," he said just before buying a handful of lottery tickets. 

The other 40 percent of buyers are airport employees like Juri Bergmanis, who works the ramp.

"I tow the airplanes around, push them around, park them," said Bergmanis. "The other airline people, we say this is our retirement." 

A baggage handler, a cook, a clerk and a woman who pushes passengers around in wheelchairs also stop at the lottery booth.

These regulars say they're not spending any more than usual this year, so they're not the reason for the lottery's sales boom.

The top selling Minnesota lottery retailers in FY12 (in descending order):

1)  Minneapolis-St. Paul Airport Foundation
2)  M&H Gas - Moorhead
3)  Orton's Moorhead Food Mart
4)  Holiday #005 - 629 Rice Street, St. Paul
5)  East Grand Station - East Grand Forks
6)  Rainbow Foods - 2919 26th Ave. S., Minneapolis
7)  Cub Foods - Brooklyn Center
8)  M&H Gas - 721 Arcade Street, St. Paul
9)  Cub Foods - Maple Grove
10)  Cub Foods - Crystal

Minnesota Lottery Director Ed Van Petten says the big jackpots helped boost sales of $2 Powerball tickets this year, and drew some new small betters. 

"The lottery is a very cheap form of entertainment," Van Petten said. "And it's kind of a dream: the Powerball ticket in the pocket, and you just kind of dream what you might do with it."

Lottery Director Ed Van Petten
Minnesota Lottery Executive Director Ed Van Petten says the Minnesota lottery had an exceptionally good year, especially considering the three-week state government shutdown in July 2011, during which no lottery tickets were sold.
MPR Photo/Sasha Aslanian

Those lottery dreams seem to have grown even in a time when people have pulled back on other gambling. Casino gambling is down 10 percent to 20 percent over the last three years, according to the Minnesota Indian Gaming Association.

Charitable gambling -- pull tabs generally sold in bars and restaurants -- is also down.  

But the Minnesota Lottery has seen the opposite trend, according to research director Don Feeney.

"What seems to have happened is a shift from more expensive evenings out at the casino, or to the bar playing pulltabs or whatever, to, let's pick up a couple scratch tickets on their way home on Friday."

The average lottery player closely resembles the average Minnesotan, according to Feeney: middle income, and middle aged. 

Lottery director Ed Van Petten says the lottery spends about $6 million a year in advertising, part of its 5 percent administrative costs.

Where does the money go?
This graphic, provided by the Minnesota Lottery, indicates how the state's share of lottery proceeds is spent. In the 2011 fiscal year, the lottery paid more than $121 million to the state.
Courtesy of the Minnesota Lottery

"We try to get a sense of who's buying the tickets and try to find out why, so we can do it again," he said.  

A longtime critic of state-sponsored gambling says that's just the problem.

Tom Prichard is president of the Minnesota Family Council, which supports evangelical Christian family values. 

"When you have the state involved, they're targeting and preying on their own citizens, and I think that's a unique situation here which really is a bad message," said Prichard. "It really corrupts ... the relationship between the citizens and their government when their government's actually out to take advantage of them."

Prichard says it's a game predicated on losing, and takes money from people who can ill afford to lose it.

But Juri Bergmanis, the guy who tows airplanes around, doesn't see it that way. He said he won $500 once, and he's sanguine about losing -- beyond the payouts to the winners, a quarter of the lottery's sales go to the state. 

"I'm a bicyclist, so I know the money goes to the environment and the bike paths and all that," he said. "And that part, actually I like it because I use it. Some people say it's double taxation but it all goes to help out."

And the state is hoping even more Minnesotans will want to "help out." 

On the horizon is a substantial expansion of gambling with the arrival of electronic pulltabs to fund a new Vikings stadium. 

Lottery director Van Petten said he's not worried about the competition. In fact, he predicts another record year for the lottery.